DUBAI: Nearly $1 trillion of real estate and infrastructure projects have been announced in Saudi Arabia since 2016 as the kingdom races towards achieving its Vision 2030 goals.
A survey by global property consultant Knight Frank said nearly $300bn of the total spend is dedicated to new infrastructure, including vast new passenger rail networks and a brand-new airport for Riyadh ($147 billion), which is expected to be the home base for a new national airline.
Neom, a project for a smart and tourist cross-border city being constructed in the far north-west of Saudi Arabia, alone will cost an estimated $500 billion and is being positioned as a new vision for future cities, Knight Frank said in a statement.
Faisal Durrani, Partner – Head of Middle East Research at Knight Frank, said all of the $1 trillion projects under Vision 2030 are “colossal” and “this is only about a third of the total spend planned”.
“Saudi Arabia is a country being reborn. The number and value of mega projects around the country set to transform the country’s real estate landscape, standard of living, lifestyle offering and perhaps most importantly, showcase the Kingdom’s vision for an ultra-modern future to a global audience,” he added.
Durrani said the target of attracting 100 million annual visitors to the country by 2030 meant both adequate and first-class gateways need to be created. Some of these projects, he said, are already trickling through.
“Take for instance the new cruise terminal at Jeddah Islamic Port – the first cruise routes are already in operation. And these developments are not vanity projects; they are going to have a significant impact on economic growth,” he said.
The cruise industry itself is set to create up to 50,000 jobs nationally, according to the Public Investment Fund and 1.5 million cruise visitors are expected annually by 2028.
On the real estate front, Knight Frank highlights eight new cities that are planned, mostly on the country’s western seaboard, along the Red Sea coast, where nearly $575 billion is being spent to deliver over 1.3 million new homes, more than 3 million sqm of offices and over 100,000 hotel rooms.
Meanwhile, Riyadh is poised to become entrenched as the commercial nerve center for the Kingdom, with more than 100,000 new homes expected by the end of 2023 and close to 3 million sqm of new office space in the works, along with over 12,000 hotel rooms, spread across mega projects worth an estimated $63 billion.
Harmen de Jong, Partner – Real Estate Strategy and Consulting, Knight Frank, said most private sector real estate developers were sitting on the fence during the first few years following the announcement of Vision 2030. But, he said, inquiries for development consultancy and development management services increased significantly over the last six to 12 months.