The real estate business sector in Saudi Arabia is expected to reflect a record boom because of the Vision 2030 strategy based on multibillion dollar giga and mega projects for building world class planned cities with modern innovative facilities. Real estate experts say that the growth in this sector will be driven by foreign investors because of Visions 2030 vibrant city projects and 2027 Asian Cup new facilities’ construction, including renovation of old stadiums. As investors have shown their keen interest in real estate for leading the socio-economic transformation presently underway in Saudi Arabia.
Since 2016 when the Vision 2030 plan was launched, the Government of Saudi Arabia has taken various measures to diversify its economy and one of them is the development of real estate to reduce its dependence on oil and gas revenues. The central theme of this initiative is to improve quality of life for residents and citizens of the Kingdom.
Real Estate Projects are Key Elements of Vision 2030
Since the inception of Vision 2030 in 2016, Saudi Arabia has financed $1.1 trillion in real estate and infrastructure developments through 15 GIGA projects around the Kingdom and Riyadh’s 8 Mega projects for capital development. In addition, the Kingdom has allocated funds for real estate and infrastructure projects, with at least 8 new cities planned predominantly along the coast of the Red Sea. We can say that real estate projects are key elements of Vision 2030.
The largest of these projects is the NEOM which will consist of approximately 300,000 new houses. The various 15 Giga Projects, some of them in the form of super-cities around Saudi Arabia and Riyadh’s 8 Mega Projects of construction in the Kingdom’s capital are given below.
15 GIGA PROJECTS in Real Estate and Infrastructure Development in Saudi Arabia
- KING SALMAN PARK
- AL ULA
- JDC- JABAL OMAR
- RED SEA PROJECT
- DIRIYAH GATE
- JEDDAH ECONOMIC CITY
- JEDDAH CENTRAL PROJECT
- KING ABDULLAH FINANCIAL DISTRICT
- KING ABDULLAH ECONOMIC CITY
- SDC-SOUDAH & RIJAL ALMAA
Riyadh’s 8 Mega Projects in Infrastructure for Capital Development
- MALL OF ARABIA
- AL WIDYAN
- MISK FOUNDATION CITY
- MALL OF SAUDI
- THE AVENUES MALL
- LAYSEN VALLEY
- SEDRA COMMUNITY
- DAHIYAT AL FURSAN
Construction Work in Saudi Real Estate Projects
Saudi Vision 2030 has set construction work in the Saudi real estate projects and infrastructure building with more than 555,000 residential units, 275,000 hotel rooms, 4.3 million square meters of retail space, and over 6.1 million square meters of new office space expected to be completed by 2030. These proposed planned construction work of GIGA and MEGA projects will make Saudi Arabia the world’s biggest construction site with a total investment of USD 1.1 trillion (SAR 4.13 trillion) in infrastructure and real estate projects according to the latest report of Knight Frank.
NEOM is the largest among the 15 GIGA projects announced till date. There is a proposal of 300,000 new houses which will accommodate approximately nine million residents on completion by 2030. However, USD 7.5 billion of sub-projects of NEOM have been commissioned so far, with 29% construction work of these projects is in progress.
The other GIGA project is the Diriyah Gate with a fund of USD20 billion which will add 20,000 more homes to Riyadh’s residential stock by completion in 2027. As per experts’ estimates, 46% of Diriyah Gate’s construction has been completed on the expenses of USD 5 billion. Likewise several other projects are in progress.
Vision 2030 Transforming the Housing Sector in KSA
The Saudi Vision 2030 reshaping the journey of home ownership across the Kingdom.
Reforming the housing sector in KSA and improving the access to own homes for Saudi families as per their needs is one of the key elements of the Vision 2030. In 2017, there were 1.6 million Saudi nationals on waiting lists for government housing programmes.
Therefore, in an interview with Al Arabiya News, the Saudi Crown Prince Mohammed bin Salman (MBS) pointed out home ownership was ‘one of the most important challenges that existed’ before Vision 2030 implementation. Because the level of housing did not increase, which always remained between 40 and 50%.
The Vision 2030 reveals that ‘housing is the primary or foundational asset that shapes and influences the vibrancy of individuals, families, communities, and broader society as a whole. Transforming the real estate industry in Saudi Arabia and increasing investment in more and more housing projects fulfills the objectives of Vision 2030 in different ways like creating sustainable job opportunities, increasing the contribution of the private sector, engaging non-governmental organisations (NGOs), and uplifting economic growth further.
Relevance of 2027 Asian Cup to Real Estate Business in KSA
Hosting the AFC 2027 Asian Cup tournament is a key aspect of Saudi Arabia’s Vision 2030 plan to diversify the Kingdom’s economy and bring foreign investment in real estate. The event will bring robust and long term benefits to the real estate and construction industries in Saudi Arabia. For this, the Saudi government has set a goal to boost the Kingdom’s household spending in the real estate sector from 2.9 percent to 6 percent by 2030. To meet this target the upcoming Asian Football Confederation (AFC) tournament will definitely play a powerful role.
2027 Asian Cup Triggers Saudi Real Estate Business
After winning the bid to host the AFC 2027 Asian Cup, Saudi Arabia has announced many construction and infrastructure plans to facilitate the events successfully. These plans include the renovation of old stadiums and construction of 3 new facilities to conduct the tournament conveniently. For this, Riyadh the capital city of the Kingdom is set for major investments along with other cities, for example:
- The King Fahd International Stadium in Riyadh is set to be renovated by 2025 with its capacity increasing to 80015 spectators.
- The Prince Faisal bin Fahd Stadium in the capital city Riyadh will also be renovated by increasing its capacity to 44,500 spectators. This project includes removing the running track, lowering the pitch, replacing two stands, and adding a new tier.
- In Riyadh 2 new stadiums will be built – the Riyadh Stadium having 22000 seating capacity and the other is the Qiddiya Sports Stadium with the same capacity is being built by the Qiddiya Investment Company set to open in 2023.
- A new 40,000 seats capacity stadium will be built in Dammam for AFC tournament 2027.
- Two stadiums in Jeddah – the King Abdullah Sports City Stadium with a 59,000 seating capacity and the Prince Abdullah al-Faisal Stadium with 27,000 capacity are being renovated to meet the AFC Asian Cup tournament standards.
It is Good Time to Invest in Saudi Real Estate
The Vision 2030 plan has opened the door for investment in Saudi real estate through 15 giga and 8 mega projects which are going on like NEOM, AMAALA, MALL OF ARABIA and others to meet the Kingdom’s growing population demand for residential units and commercial spaces. In addition, the requirements of more facilities for the AFC 2027 Asian Cup tournament have also created good opportunities for investment in Saudi Arabia’s real estate.
Because of the above factors the Saudi property market is going to boom in the near future. Therefore, it is a good time to invest in Saudi real estate for developing infrastructure and owning valuable properties in major ongoing building of vivrant cities in Saudi Arabia.
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