Saudi Arabia’s construction output value to hit $181.5bn by 2028, Knight Frank says

Saudi Arabia’s construction output value is projected to reach $181.5bn by the end of 2028, real estate consultancy group Knight Frank said on Monday, as the kingdom is on track to become the world’s largest construction market amid investment in projects aimed at diversifying the economy.

The country’s construction output value for the residential, institutional, infrastructure, industrial, energy and utilities and commercial sectors hit $141.5bn in 2023, a 4.3 per cent increase compared to the corresponding period a year ago.

“We are currently witnessing a historical transformation unfolding in Saudi Arabia with construction projects standing out in their design scale and value. Given the scale of the development pipeline, the government is hoping to attract more than $3tn in investments by 2030,” said Mohamed Nabil, regional partner, head of Project & Development Services, MENA.

The residential sector dominated Saudi Arabia’s construction output value, accounting for 31 per cent ($43.5bn) of the total output value in 2023.

Knight Frank said in its Construction Landscape Review—H1 2024 report that the value of the residential sector is projected to reach $56.9bn by 2028.

Furthermore, the energy and utilities sector accounted for $35.1bn in 2023, and the value is forecasted to reach $46.5bn by 2028.

Since the Vision 2030 initiative was introduced in 2016, Saudi Arabia has launched projects worth more than $1.25tn.

Knight Frank said the kingdom’s ongoing transformation is being driven by Vision 2030, which aims to deliver more than 660,000 residential units, over 320,000 hotel keys, and above 6.1 million square meters of new office space.

Saudi Arabia’s mega projects

 By far, Vision 2030’s most visible impact has been the emergence of new super-cities, mainly giga projects across the kingdom, particularly in the Western part of the country.

There are currently 25 giga projects that are at various phases of construction in Saudi Arabia, according to Knight Frank analysis. The country’s western region remains a focus of development, with plans valued at $692bn, accounting for 55 per cent of the total $1.25tn development plan.

The region is expected to see extensive growth in luxury residential supply and hotel accommodation, as well as retail, and office space.

While most have not yet been delivered, and some have been downsized, the Arab world’s biggest economy is working in overdrive as the 2030 deadline edges ever closer.

The majority of construction contracts awarded in 2023 were in Riyadh, where the kingdom aims to grow its population to 10 million by the end of the decade.

The capital city has been a hive of activity as Saudi Arabia prepares to host the World Expo in 2030 and possibly the World Cup in 2034.

Read: Saudi Arabia’s real estate, infrastructure projects hit $1.25tn