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Saudi Arabia Poised to Become World’s Largest Construction Market by 2028: Knight Frank Report

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In an ambitious drive to diversify and revamp its economy, Saudi Arabia is on track to become the world’s largest construction market, with projected total construction output value reaching $181.5 billion by 2028, according to a recent report by real estate consultancy Knight Frank.

This marks a nearly 30% increase from 2023 levels, highlighting the kingdom’s intensive efforts to transform its economy away from oil dependency.

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Central to this construction boom are residential properties and so-called “giga projects” — massive, multi-billion-dollar developments that form a crucial part of Crown Prince Mohammed bin Salman’s Vision 2030 initiative.

Launched eight years ago, Vision 2030 aims to reshape the Saudi economy by expanding various sectors, fostering innovation, and accommodating a growing population, along with an expected surge in foreign tourists.

“We are currently witnessing a historical transformation unfolding in Saudi Arabia with construction projects standing out in their design scale and value,” said Mohamed Nabil, regional partner and head of project and development services for the Middle East and North Africa at Knight Frank.

His statement underscores the kingdom’s rapid development and the scale of investments being channeled into these projects. Since the inception of Vision 2030, Saudi Arabia has initiated projects worth over $1.25 trillion, as noted by Knight Frank.

While not all of these projects have reached completion, and some have been downsized, the kingdom is making significant strides as the 2030 deadline approaches. In 2023 alone, more than $140 billion in construction contracts were awarded, predominantly in Riyadh, the capital city.

Riyadh has emerged as a major focal point in Saudi Arabia’s construction surge. The kingdom aims to expand the city’s population to 10 million by 2030 as part of its broader plan to host global events such as the World Expo in 2030 and potentially the World Cup in 2034.

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These events are expected to attract a significant influx of visitors and further drive demand for infrastructure and real estate development.

Key projects under Vision 2030 include the futuristic city of NEOM, which is set to feature innovations such as flying taxis and a linear city layout, and the Red Sea Project, which aims to develop a luxury tourism destination along Saudi Arabia’s western coast.

These and other giga projects are designed to attract international investments, create jobs, and position Saudi Arabia as a global hub for business and tourism.

The kingdom’s construction boom is also a response to its burgeoning population. With a median age of around 30 years and a high birth rate, Saudi Arabia’s population is growing rapidly, necessitating extensive development of housing, infrastructure, and public services.

Additionally, efforts to attract foreign talent and tourists are driving the need for diverse and modern accommodations.

As Saudi Arabia accelerates its construction activities, challenges remain, including managing the environmental impact of large-scale projects and ensuring the timely delivery of developments.

However, the commitment to transforming the nation’s economic landscape appears unwavering, with substantial investments continuing to flow into the construction sector.

In conclusion, Saudi Arabia’s construction market is set to experience unprecedented growth, underpinned by Vision 2030’s ambitious goals.

The kingdom’s determination to diversify its economy and create a sustainable, innovative future is clearly reflected in its massive construction endeavors, setting the stage for a transformative decade ahead.

 

This article was created using automation technology and was thoroughly edited and fact-checked by one of our editorial staff members

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