01 September 2019

Saudi Arabia currently holds the greatest potential for the construction sector within the GCC, with more than 5,000 capital projects worth well over $1.6 trillion in the pre-execution stage, said Linesight, a leading cost and project management consultancy.

Long-term positive factors such as economic diversification, social reform, especially in Saudi Arabia, and general demographic demand, combined with renewed government ambition, will be the key drivers.

According to Linesight, which has a GCC pipeline worth over $10 billion with average annual revenue growth of over six per cent, activity in the construction sector throughout the Gulf countries, will begin to recover steadily from the beginning of 2020, after a challenging period of subdued performance.

That includes over 150 development projects worth $3.27 billion, for the Tabuk region, in the northwest of Saudi Arabia, that were announced by King Salman bin Abdulaziz, in November last year. The king also launched more than 600 projects in Qassim, 400 km northwest of Riyadh, worth $4.36 billion and around another 200 new projects in Hail, also in the northwest of the kingdom, valued at $1.14 billion.

However, the centrepiece of its ambitious Vision 2030 initiative is the $500-billion, 26,500-sq-km, Neom project, situated along 468 km of the Red Sea coast close to Egypt and Jordan. The first phase of Neom is due for completion in 2025.

“Naturally, many regional industry professionals are now upbeat about the prospects for Saudi Arabia,” said Damien Gallogly, regional director for the Middle East at Linesight, which has offices in Riyadh, Dubai and Bahrain.

“Saudi Arabia is also actively seeking to improve its rail, airport, port and other transport-related infrastructure, as well as increase residential supply, healthcare, leisure and tourism facilities. Without doubt, the kingdom remains the most active construction market in the region, signalling exciting times ahead,” added Gallogly.

“To underpin social demand, the Saudi government has overseen a major cultural and social transition since 2017, which has allowed mixed audiences at cinemas and concerts and brought an end to restrictions on women travelling alone,” said Gallogly.

Some of the more prominent developments in Saudi Arabia include the $4-billion Thakher City mixed-use project in Makkah and the Al Faisaliah District redevelopment project in Riyadh, which involves upgrading the Al Khozama, retail, hospitality and commercial complex. Saudi’s General Sports Authority (GSA) has also launched the world’s richest horse race, with prize money worth $20 million. 

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