Tue. Sep 26th, 2023
    The Value of Saudi Arabia’s Real Estate and Infrastructure Projects Exceeds $1.25 Trillion

    According to global real estate consultancy Knight Frank, the value of real estate and infrastructure projects announced since Saudi Arabia launched its National Transformation Plan in 2016 has surpassed $1.25 trillion. As part of the Vision 2030 economic and social diversification program, the kingdom has initiated projects worth $250 billion thus far, with the aim of reducing its reliance on hydrocarbon sales.

    Saudi Arabia, the largest economy in the Arab world and the top oil producer in OPEC, has set a deadline of the end of this decade to accomplish its goals. The Vision 2030 agenda seeks to bolster the country’s industrial base, expand its infrastructure, and advance sectors such as real estate, health, and education to generate more employment opportunities for its growing population.

    The development of the tourism and hospitality sector plays a vital role in Vision 2030. The country’s sovereign investment arm, the Public Investment Fund, is supporting several projects, including the $500 billion futuristic city Neom, along with multi-billion-dollar developments along the Red Sea coast and in Riyadh.

    Faisal Durrani, partner and head of Mena research at Knight Frank, describes the real estate development programs in Saudi Arabia as one of the most expansive ever seen in the world. The value of real estate and infrastructure projects in the western half of the country has reached $687 billion, with Neom being a prominent project in that region. Neom has already awarded $70 billion in projects, 45 percent of which have been completed.

    The planned giga projects are set to transform the urban landscape and accommodate the projected population growth to 50 million by 2030. Riyadh, in particular, stands out as a hub of development activity, accounting for 18 percent of all real estate projects in progress, totaling approximately $229 billion.

    The report highlights a 30 percent increase in the number of planned residential units in the past year, reaching 660,000 units. This rise in supply is welcomed news for prospective homeowners, as it may help address the affordability challenge in the market. The commercial market is also flourishing, with 5.3 million square meters of retail space and 289,000 hotel rooms planned. Additionally, the office real estate pipeline in Saudi Arabia is steadily growing, reaching six million square meters.

    The report concludes that the transformation is evident across the entire urban landscape of Saudi Arabia, with the real estate and infrastructure projects playing a crucial role in the country’s pursuit of economic diversification and attracting millions of visitors by 2030.

    – Knight Frank’s annual Saudi Giga Projects report