Saudi Arabia's National Transformation Plan, launched in 2016, has seen the value of real estate and infrastructure projects yet to be completed reach over $1.25 trillion. Additionally, ongoing projects are worth $250 billion. This is according to Knight Frank's latest report; The Saudi Report 2023.
STEADY GROWTH IN OFFICE SPACES
Despite the pandemic, Saudi Arabia's office pipeline remains stable at 6 million square meters. The recent completion of 300,000 square meters of office projects has contributed to this figure, according to the Knight Frank report. This is important due to the shortage of prime Grade A office spaces in cities like Riyadh. So, unlike several global hubs, Saudi Arabia is not struggling to recover occupancy rates to pre-pandemic levels.
EXPANDING COMMERCIAL SECTORS
Saudi Arabia's plans include 5.3 million square meters of retail space and an extra 289,000 hotel rooms. These developments align with the nation's goal of attracting 100 million visitors by 2030, positioning Saudi Arabia as the 14th most visited country globally.
WESTERN PROVINCES LEADING TRANSFORMATION
The western half of Saudi Arabia plays a key role in the nation's transformation, with $687 billion of real estate projects due for completion by 2030. This region hosts prominent projects, including the $500 billion supercity NEOM. Various aspects of NEOM, such as Trojena and Sindalah, have been revealed, with $70 billion worth of projects already awarded, 45% of which are complete.
CHALLENGES IN CATERING TO DOMESTIC BUYERS
The Knight Frank report notes that the challenge for giga project developers is appealing to domestic buyers. Most of them have home budgets of under $400,000. Yet, most giga projects are expected to launch residencies worth over $1 million. Bridging this gap between demand and expectations will be a key consideration.
Riyadh is experiencing an evolution as Saudi Arabia's primary commercial and financial centre. It contributes to 18% of all ongoing real estate and development projects, valued at around $229 billion. Riyadh aims to construct over 241,000 homes and introduce 3.6 million sqm of office space by 2030. This addition of office space is a relief for tenants struggling with a supply deficit, pushing Grade A occupancy rates to an average of 98%.
Riyadh's development pipeline is around a quarter of the planned $1 trillion total spend to transform the capital, according to the report. Riyadh is aspiring to host the 2030 World Expo, which could speed up transformation and realise the city's grand vision.
ADVANCED GIGA PROJECTS
King Salman Park is one of Riyadh's most advanced giga projects. It has awarded $8.8 billion in contracts within the $9 billion development, set for completion in 2027. It will feature over 12,000 homes, more than 600,000 square meters of office space, and over half a million square meters of retail offerings.
Besides the Giga projects, Saudi Arabia emphasises the well-being of its residents through world-class urban environments. Projects like Qiddiya Coast theme park, Riyadh Sports Boulevard, and 'Green Riyadh,' which will plant 7.5 million trees, contribute to this focus. Healthcare and education are also considered, with plans for 24,000 hospital beds and 60 new educational institutions. These aim at improving the lives of citizens and residents and attracting international talent.
As a whole, Saudi Arabia's ambitious real estate and infrastructure projects reflect the nation's ambitions to transform and modernise its cities while focusing on the well-being of its people.