Driven by Vision 2030 and significant investments in infrastructure and real estate, Saudi Arabia’s construction market is set for substantial growth, according to JLL’s annual roundtable in Riyadh. The market, currently valued at $70.33 billion, is projected to reach SAR342.6 billion ($91.36 billion) by 2029. With over $20 billion in projects underway, Riyadh is emerging as a key investment hub.
Hotel Investments on the Rise
JLL highlighted the sector’s momentum, forecasting a 30% surge in hotel investments. Government initiatives are reshaping the landscape, even as the overall value of awarded projects slows, with many moving to the execution phase, boosting future spending.
Market Strengths and Challenges
The roundtable underscored strengths like streamlined regulations and the need to reassess project pipelines. Although the market shows signs of cooling, increased capacity and ongoing economic diversification support continued growth.
Key Megaprojects Driving Diversification
Flagship projects like Diriyah Gate, King Salman Park, and Expo 2030 are central to Riyadh’s role in economic diversification. Demand for Grade A offices, residential sales, and hospitality is surging.
Saud Alsulaimani, JLL’s KSA head, noted that 2024 marked a shift toward project evaluation, regulatory improvements, and private-sector engagement. He anticipates strong Q4 performance across sectors, driven by innovation, sustainability, and resilience.
Hospitality Boom
Investor confidence in Riyadh’s hospitality sector is rising, with hotel investments projected to grow by 30% by 2025, supporting the Kingdom’s goal of attracting over 150 million visitors annually by 2030.
Tourism and Hospitality Evolution
Amr El Nady, JLL’s MEA managing director for Hotels & Hospitality, highlighted Riyadh’s evolving tourism and business sectors. Sustainable practices and new experiences are shaping the hospitality landscape, with tourism poised to contribute 10% to GDP. Emerging destinations like Abha and AlUla present opportunities for flagship projects.
Residential and Office Market Growth
Population growth and urbanization are driving residential demand in Riyadh, pushing up sales prices. Grade A office rents have increased 21% year-on-year, reflecting strong demand for high-quality workspaces.
Collaboration and Vision 2030
JLL leaders emphasized Riyadh’s central role in Vision 2030, with stakeholder collaboration enhancing efficiency and innovation. Despite project delays, Saudi Arabia’s long-term vision remains robust, with significant investments peaking by 2027.
Sustainability and Global Events
The Kingdom is prioritizing sustainability, with government mandates on local content and green initiatives. Major events like the World Cup 2034 and Expo 2030 are expected to accelerate growth, boosting Saudi Arabia’s global standing.
