Contract awards inevitably slumped in 2020, decreasing by around 60 percent as movement restrictions and supply chain disruption as a result of COVID-19 caused disruption to the national economy.
The kingdom is seeking to take advantage of the global economic recovery to attract international investors and bolster construction activity.
PIF'S FIVE-YEAR PLAN
The PIF's five-year strategy aims to increase the value of its assets under management to USD1.07 trillion. It will commit USD40 billion a year to develop the domestic economy and lessen the burden on the government, which has shouldered much of the country’s capital expenditures over the last few years.
This is particularly important for the construction sector, which suffered from a severe reduction in capital expenditure over the course of the pandemic.
Roshn, a company launched by PIF last year to develop urban communities, is already leading the charge. It started awarding contracts at the end of 2020, working on its first new communities in the capital, Riyadh. Roshn was launched to help Saudi Arabia realise its goal of increasing home ownership to 70 percent by 2030.
NEW OPPORTUNITIES FOR INVESTORS
Saudi Arabia is awash with major new construction projects that will present big opportunities for real estate investors.
One of the biggest is Neom, the kingdom’s innovative sustainable city; the Red Sea Development Project, the Qiddiya entertainment city and the Diriyah Gate project are also in the pipeline. These so-called “gigaprojects” are all backed by the PIF, and hope to make Saudi Arabia extremely attractive to investors, multinationals and tourists.
They are part of the country’s push to wean the national economy away from oil exports, which account for more than half its national income.
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