Saudi Arabia currently holds great potential for the construction sector within the GCC, with 5,000-plus capital projects worth more than US$1.6tn in the pre-execution stage, according to Linesight, a 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 main drivers, a report of Linesight said.
According to Linesight, which has a GCC pipeline worth more than US$10bn, activity in the construction sector throughout the GCC countries, will begin to recover steadily from the beginning of 2020, after a challenging period of subdued performance.
That includes more than 150 development projects worth US$3.27bn, for the Tabuk region, in the north-west of Saudi, that were announced by Saudi Arabia?s King Salman bin Abdulaziz, in November last year. The King launched more than 600 projects in Qassim worth US$4.36bn and around another 200 new projects in Hail valued at US$1.14bn.
However, the centrepiece of its Vision 2030 initiative is the US$500bn Neom project, situated along 468km of Saudi Arabia?s Red Sea coast close to Egypt and Jordan. The first phase of Neom, is due for completion in 2025.
?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,? Damien Gallogly, regional director for the Middle East at Linesight.
?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,? added Gallogly.
The project developments in Linesight?s own GCC pipeline are worth in excess of US$10bn, with average annual revenue growth of over six per cent. Some of the more prominent developments in Saudi Arabia include the US$4bn 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 Arabia is committed to completing these projects and is confident that it will be find the appropriate finance to do so. It is this strategic intent that in my opinion, makes the kingdom the most dynamic construction market in the Middle East,? Gallogly concluded.
