Saudi Arabia’s Construction Contracts Reach $142 Billion

Knight Frank states that since the 2016 launch of Saudi Arabia’s National Transformation Plan, project budgets have topped $1.25 trillion

Saudi Arabia is experiencing a significant surge in its construction activities, with the construction output value for the residential, institutional, infrastructure, industrial, energy and utilities, and commercial sectors reaching US$141.5 bn, up by 4.3% compared to last year, according to the latest analysis by global property consultancy Knight Frank’s Construction Landscape Review report for Saudi Arabia.

Mohamed Nabil – Regional Partner, Head of Project & Development Services, MENA, says: “We are currently witnessing a historical transformation unfolding in Saudi Arabia with construction projects standing out in their design scale and value. Given the development pipeline scale, the government hopes to attract over US$ 3 trillion in investments by 2030, a figure recently confirmed by the Minister of Investment during last month’s inaugural Sino-Gulf Cooperation for Industries and Investments Forum in China.”

This substantial investment in transforming the Kingdom is at the heart of Vision 2030 and will also strengthen the Kingdom’s position as a global hub for tourism, commerce and trade.

Knight Frank says that since the launch of Saudi Arabia’s National Transformation Plan in 2016, the total budgeted value of real estate and infrastructure projects has surpassed US$ 1.25 trillion. This transformation is evident across the entire urban landscape, driven by Vision 2030, which aims to deliver over 660,000 residential units, more than 320,000 hotel keys, over 5.3 million sqm of retail space, and more than 6.1 million sqm of new office space by the end of the decade.

Mohamed continued, “Notably, 38% of the existing contract award value accounts for Riyadh Province, equating to US$ 54bn, followed by Mecca and Tabuk Provinces at US$ 28.7bn and US$ 28.5bn, respectively. While construction sector contract awards account for 61% of the total value, the transportation sector follows in second place at 33%, highlighting the significant investment in bolstering the capital’s transportation infrastructure as the population swells to a projected 10 million by 2030.”

The residential sector primarily dominates Saudi Arabia’s construction output value, accounting for 31% (US$43.5 bn) of the total output value in 2023 and is projected to reach US$56.9 bn by 2028, according to Knight Frank’s analysis. The energy and utilities sector follows closely in second place, with a value of US$35.1 bn, which is forecast to increase to US$46.5 bn by 2028.

According to Knight Frank, by the end of 2028, the Kingdom’s construction output value for all sectors is forecast to reach US$ 181.5bn, making Saudi Arabia the world’s largest construction market.