A case study in procurement
18 March 2025
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While it may not be in the headlines as much as some of its more eye-catching official gigaproject counterparts, Roshn has already delivered thousands of residential units in Saudi Arabia as it seeks to fill the upscale and community living housing map.
Launched in 2020, the Roshn gigaproject is a component of the Vision 2030 plan to achieve 70% home ownership among Saudi nationals by 2030. Alongside the National Housing Company, it is the delivery vehicle for government-backed housing construction as Riyadh seeks to meet the shortfall in available stock.
Its first project was its Sedra community in the north of the capital. Currently on its fourth of eight delivery phases, the multibillion-dollar masterplanned development will comprise 30,000 homes over 20 million square metres (sq m) when completed.
Roshn’s second Riyadh community under construction is Warefa in the northeast of the capital. More compact than Sedra, it will have 2,300 units over an area of 1.4 square kilometres, with 150,000 sq m of green open space.
Three years after the launch of its first projects, Roshn announced Marafy, its first scheme in Jeddah and its largest mixed-use development to date. Designed to accommodate more than 130,000 residents, Marafy will be built around an 11-kilometre, 100-metre-wide canal, linking with Obhur Creek in the northern outskirts of the kingdom’s second city.
Already breaking ground, Marafy’s first core component is the Alarous residential community, which will offer 18,000 units over a 4 million sq m land area.
Elsewhere in the kingdom, Roshn’s other planned community projects include Almanar in Mecca, Alfulwa in Hofuf and Aldanah in Dhahran. Between them, these schemes total more than 50,000 units. It is expected that thousands of additional homes in other parts of the kingdom will be announced by the developer in the next two years.
Delivering such projects at many different locations is a complex exercise, requiring procurement strategies that not only encompass on-time and on-budget completion, but also ensure that local content is maximised while at the same time maintaining stringent quality standards.
Tasked with handling Roshn’s overall procurement strategy is Iain McBride, the gigaproject developer’s head of commercial.
It is expected that thousands of additional homes in other parts of the kingdom will be announced by the developer in the next two years
Like other gigaprojects in the kingdom, McBride and his procurement team have had to deal with the twin challenges of soaring cost inflation and maximising local content in materials and equipment.
The five official gigaprojects – Diriyah, Neom, the Red Sea Project, Qiddiya and Roshn – are free to employ their own procurement rules and processes, and each has taken a different approach to address its specific requirements. For example, Red Sea Global uses a construction management approach wherein it contracts directly with companies and suppliers that would normally work as subcontractors under the main contractors.
Similarly, Diriyah Company employs a strategy of bundling several smaller contract packages into a single large contract, as a means of consolidating work to ensure lower costs and maintain contractor interest.
Hear directly from the gigaproject owners at the biggest construction event – The Saudi Gigaprojects 2025 Summit, happening in Riyadh from 12-14 May 2025. Click here to know more
Demand signalling
The nature of Roshn’s mainly residential projects means that from the outset it knew it would need thousands of items with similar specifications, such as doors; glass panes; sanitaryware; and heating, ventilation and air-conditioning systems.
To secure this supply chain, early on the company identified local manufacturers of these products and reached long-term agreements with them for the delivery of required materials.
“Our first step was signing a lot of long-term partnership agreements through master purchase agreements where we could leverage preferential rates,” says McBride, speaking to MEED in late January.
“Ultimately, it's all about balance and risk – derisking the opportunities for the supply chain by telling them how many doors, for example, we're going to need each quarter for the next five to 10 years. It gives confidence to the manufacturers that they can start committing to.”
Roshn was the first of the gigaprojects to publicly signal its demand requirements. In 2021, it announced that it would require at least 5 million doors, 3.5 million air-conditioning units, 4.3 million windows, 80 million sq m of tiles and 6.5 million pieces of sanitaryware. These numbers have since changed, but they are indicative of the scale of the supply chain challenge.
Armed with the knowledge that Roshn is both supported by its parent, sovereign wealth vehicle the Public Investment Fund (PIF), and that it is a central element of Saudi Vision 2030, local manufacturers had the confidence to commit to investing in production capacity to meet its needs.
Significantly, most of these deals have been with manufacturers within the kingdom, thereby maximising the local content aspects. Just as importantly, Roshn has not had to make any fixed orders – so-called ‘take-or-pay agreements’ – with suppliers, such is the latter’s faith in the developer.
“For the time being, we’ve not had to make any firm commitments,” says McBride. “We did look at it at one point, but our approach has always been to keep it as simple as possible by listening to the supply chain and seeing what they need. When we were speaking to them, it wasn’t their number one driver; they weren’t screaming at us saying, ‘We need you to give us a firm order’.
“Now, many people think a take-or-pay agreement is essential – where you commit to ordering [a certain quantity] of materials over a period of months or years and, if you don’t, you have to pay a penalty, thereby adding risk and complexity for the developer.
“What we were able to agree instead was that we'll be open and transparent with [the suppliers about] what we need. We said to ourselves, ‘Let's get a good price that works, whether we buy directly from the supplier or whether we include that supplier within our tenders with major contractors’. And we’ve seen great success with that approach, with multiple companies.”
The localisation push is supported by the design process. Wherever possible, the designs for Roshn’s projects incorporate and specify equipment and materials that are known to be manufactured locally.
There have been instances where specific, specialised materials and products are not produced in the kingdom, or not in the quantities required, such as marble and certain architectural facades.
Where this is the case, Roshn is keen to explore how it can help to build in-kingdom capacity. The developer has initiatives through which it looks to co-invest in production facilities that come with high capital requirements.
As McBride explains, Roshn is only one part of the huge and rapidly accelerating Saudi projects market ecosystem, and in helping to increase capacity, it is also putting itself in a position to help other developers with their supply chain needs.
A case in point is Roshn’s contract with China Harbour Engineering Company, which was awarded the $2bn deal in 2023 to build villas at Sedra and Warefa.
Part of the contract requires the Chinese contractor to set up a precast manufacturing facility on site at Sedra. In this way, Roshn could not only ringfence the plant for its own needs, but when it no longer requires the output, other projects could benefit from its production capacity.
“The factory has a 15-year lifespan, so any additional capacity will be there for another 10 years after our requirements are met,” says McBride. “In Riyadh, we have Expo 2030, the new airport, the stadiums and many other projects that could draw on its output.”
There are some situations where even this is not enough, particularly when it comes to contracting expertise. One such case is Roshn’s mandate to develop a 45,000-seat stadium in the southwest of Riyadh as part of the kingdom’s Fifa World Cup 2034 plans. On such a complex, highly engineered project, Roshn has insisted that an international contractor teams up with a local company as a condition of tender participation.
This insistence is based on Roshn’s experience overseeing the construction of a football stadium in Dammam alongside co-developer, Saudi Aramco. The project, which is being built by a joint venture of Belgium’s Besix and the local Albawani, is proceeding at a rapid pace and progress has been relatively trouble-free.
McBride says: “If we have to go abroad, let’s go abroad. But make sure it’s done in a smart way and that we’re not just throwing money out of the kingdom.”
Early contractor involvement
On the issue of contracting, it is well known that the massive amount of work in Saudi Arabia is stretching contractors to the limit, pushing up prices and straining labour, engineering and equipment resources.
Roshn’s approach to this challenge has been to engage with contractors at the earliest possible stage of project planning, specifically at the design phase, through an early contractor involvement (ECI) procurement framework. In this way, the company is able to obtain contractor feedback during concept and design and subsequently lower construction risk by improving a project’s constructability.
“It's about signposting the demand by getting the contractor in early, where you can really influence the design, the buildability and the value-engineering opportunities,” says McBride. “Ideally, we bring them in as quickly as possible during the concept stages, when there's very little cost to changing things.
“The worst thing for a contractor is receiving a [request for proposal] cold. They have to … come back in four weeks and then be squeezed for a best price, whereas with ECI they can add value. They really appreciate that.”
When asked to quantify the cost benefits of such an approach, McBride is forthright: “It’s not even a case of doing the maths,” he says. “We have a great example of where it’s worked on our Aldanah project in Dammam. We selected the contract very early on and locked in the floor plans and facades that we wanted. We were then able to deliver a street of 10 show homes [that took] not much more than four months to design and construct.
“The saving, in terms of time, was massive; we probably halved the duration. I probably wouldn’t be exaggerating if I said it saved about a year.
“There are two ways you can follow your engineer,” he continues. “One: you can follow them early and make sure that the way you're looking to save costs is in areas that are not impacting the customer.
“Or two: the worst thing you can do is get to the end and you have a full structural design that could be over-engineered and you’re spending money in the wrong places.
“We don’t want to get to a point where we're trying to value-engineer by cutting things out that are important to customers,” McBride explains. “And that's what you avoid by having this early contractor involvement.”
The company is able to obtain contractor feedback during concept and design and subsequently lower construction risk by improving a project’s constructability
Unlike the other gigaprojects, Roshn has been in the favourable position of being able to raise some revenue by marketing and selling its properties off plan. While this has been beneficial from a development perspective, it has also meant that the developer must get its pricing and housing specifications right if it is to develop homes within an already-defined budget.
Having a contracting partner on board during the design and specification stage facilitates the conversation between the property sales team, which is informing on market requirements, and the builder, who can deliver within the designed cost and quality parameters.
This is in contrast to many real estate developments for which sales are completed before the construction estimates come in, potentially undermining the business case.
The step beyond ECI is for contractors and suppliers to partner with Roshn to inject equity into the projects by acting as co-developers. McBride points to several planned mid-rise towers at Marafy that could be a starting point for this.
Contractors financing projects or bringing in replacement equity has long been an ambition in the region, but builders have been reluctant to adopt this approach. Nonetheless, McBride is confident that it could happen, indicating that there has already been strong interest from the contracting community.
Cost inflation
Another major talking point in Saudi construction is the escalating costs caused by high inflation, logistical challenges and a tightening of contracting and skilled labour capacity.
In many cases, this has required the rescoping of projects, revisions to timelines and even the scrapping of elements. Neom is arguably the best example of this, as it has reprioritised The Line and is facing an estimated cost of $50bn for building each of its first three modules – far in excess of original estimates.
Roshn’s approach to the challenge is to be as open and transparent as possible with the contractor and supplier community. This has involved outlining a long-term pipeline of work that gives the supply chain confidence about its requirements, enabling them to fix in long-term pricing structures. In return, the developer expects prices to come in competitively.
“It’s no secret within the supply chain market that Roshn has quite aggressive price points,” says McBride, a former chartered surveyor who, prior to joining Roshn, worked as a quantity surveyor and cost-management director at consultants Faithful+Gould (now AtkinsRealis) and Rider Levett Bucknall.
“What we're trying to do is engage early, build trust with the contractors, let them see we’re a good client that's going to pay and have honest and fair contracting terms, and work together to try and solve issues post-contract.
“We don't mind if there's inflationary pressures because of commodity prices increasing. But what we're trying to avoid is inflationary prices through just the demand increasing.
“An innovative way that we've implemented this even on our lump-sum contracts – our traditional Redbook or older contracts – is that we have preferred supplier agreement clauses in them,” he adds.
“So, rather than a traditional bill of quantities (BoQ) that has a rate, a quantity, a total, within our rate section we have the material supply rate, the installation rate and then everything else, such as overhead profit. We protect the installation rate, so it's not a percentage of the material; it's a fixed SR100 a square metre to install, for example.
“One of the big frustrations for contractors is [that the supplier has] a material we think they're going to deliver. It's maybe not available, so they submit alternative materials. The client keeps rejecting it – it's not what they want – and it becomes a delay; it's painful.”
McBride gives the example of a pre-approved bathroom sink. Thanks to Roshn’s relationships with key long-term suppliers, the company is able to negotiate better rates for sanitaryware than would be available to a contractor on an ad hoc basis. If the developer’s rates for sinks are better than the BoQ, it splits the savings 50:50 with the contractor.
“The contractors are winning out of that exercise, we're winning out of it and, ultimately, the customers are winning out of it as well, because we’re passing on those savings,” says McBride.
Flexibility
The benefits to contractors and suppliers extend to payment terms. In today’s sellers’ market, vendors are effectively able to pick and choose the clients they want to work for. As a result, clients – including the gigaprojects – have had to introduce more flexible payment terms and develop market reputations for paying on time.
Roshn may lead the pack on this, with an average payment time from invoice to payment of just 13 days in 2024. A decade ago, this would have been unheard of, but it is now increasingly becoming the norm among the gigaprojects.
In addition, like its PIF peers, Roshn has done away with tender fees and tender bonds, viewing them as outdated means of enforcing vendor participation, especially given the tight liquidity and cashflow situation in the projects market in Saudi Arabia.
Will such flexibility ever extend to performance bonds? McBride is sceptical, pointing to the fact that Roshn’s strong relationship with local banks allows to it facilitate credit agreements between contractors and their lenders. Being a gigaproject developer supported by the PIF – and by tacit extension the state – also helps provide the underlining ease of mind for financers.
Nonetheless, Roshn also takes a proactive approach with advanced payments, enabling up to 20% of the total contract value at the initial stage of the project.
“We've been quite clever in how we do this,” says McBride. “We don't go and release 20% straight away. We’ll do 10% and then, when we’ve evidence that you’ve expended that 10% on mobilisation and site establishment, we’ll release the second 10% tranche.”
Subcontractors
One of the chief sticking points in the kingdom’s projects ecosystem in the past decade has been the capacity and capability of its subcontractors.
The payments crisis in 2017-20 forced many main and general contractors to reduce their permanent labour forces, plant and general resources. Wary of a repeat, most have retained their leaner structure and so have turned increasingly to subcontractors for their manpower and delivery requirements.
In theory, this makes sense, but in practice subcontractors in Saudi Arabia are themselves often overstretched in terms of both delivery capacity and labour availability. In turn, they frequently use their own subcontractors, which then also outsource, to the point that specific elements of a project may be completed by companies very far down the supply chain – with the quality issues that this implies.
Roshn’s solution is to ensure any subcontractor on site goes through a vetting process encompassing quality and financial checks, thereby ensuring it has full visibility on every company on site.
Increasingly, Roshn is dealing with suppliers directly, under supply-install contracts. This can create interfacing issues with the main contractors, however, which are ultimately responsible for the project’s delivery.
“We have to be quite careful on that,” McBride says. “We have to go through all the checks and balances during the prequalification process because if we are going to give a subcontractor to a contractor that we're saying is pre-vetted by Roshn, we could be opening the door to lots of claims from the main contractor against us. So, vetting for us is absolutely crucial.”
Roshn is also working with smaller suppliers and subcontractors to help them evolve and grow, so that they can start taking on smaller main contractor roles themselves.
“Not every construction package we award is in the billions of riyals,” says McBride. “Our thinking is to let the big tier-one contractors focus on the multibillion-riyal deals while we encourage the smaller ones to grow as part of our supplier development programme.”
To achieve this, the developer holds events and bootcamps with its vendors to discuss best practices on subjects including health and safety, variation procedures and how to submit good tender returns.
Roshn is also working with smaller suppliers and subcontractors to help them evolve and grow
Building information modelling
Vendor education also extends to the use of building information modelling (BIM) and other construction technologies.
BIM is mandatory on Roshn’s projects, as it is on the other gigaprojects. While use of the technology is standard across almost all main contractors in the region, its take-up among smaller companies in the supply chain has been slower, with firms pointing to the cost of its adoption and integration as a barrier, as well as the fact that some clients, particularly government ones, view it as providing limited benefit.
Roshn’s task in this area is made difficult because its projects are less complex from an engineering and construction perspective.
“We’re building villas; it’s completely different to building stadiums or airports,” McBride says. “Can these contractors build from [two-dimensional] drawings? Yes, of course they can. You're not going to convince a smaller contractor that all of these benefits will make it easier to build because they know how to build. They've been doing it for decades.
“But the savings are in making it easier to procure, savings in the repeatability, and in the change control. If you upskill yourself on a Roshn project, you are building your capability, which you can then [demonstrate] to other clients as proof you can go after bigger and more complex projects. It's something that the whole industry has to get behind.”
Indeed, there is much to learn from Roshn’s approach to delivering its infrastructure and building plans. While the comparatively straightforward nature of its projects means that its procurement strategies may not be suited to those gigaprojects with more iconic designs, for many other developers it is a case study in efficient processes that have proven effective in delivering work on time and to budget.
This is just as well given that Roshn is set to embark on the next stage of its journey, with its focus on the more complex Marafy city development in Jeddah and Roshn Stadium in Riyadh. However, the evidence suggests that from a procurement strategy perspective, it is well-positioned to also make this a success.
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Oman steadies growth with strategic restraint
31 December 2025
Commentary
John Bambridge
Analysis editorOman’s economic story in recent years has been one of steady rebalancing rather than dramatic transformation. Amid sharpening regional headwinds and geopolitical uncertainty, Muscat has pursued a measured diversification strategy that is steadily paying off. In 2025, the sultanate reached a critical inflection point in this journey: non‑hydrocarbon activity rose to account for more than 70% of GDP.
This reflects a government-led diversification agenda that has only accelerated since the pandemic, with redoubled support for logistics, tourism, mining and green energy. The sultanate is nevertheless walking a careful line between ambition and restraint. The government has clear spending limits, and fiscal prudence remains the implicit byword for any public investment. However, Oman’s key growth sectors are also those that offer long-term resilience and align with the country’s natural advantages.
In the energy sector, Oman LNG is pushing ahead with its plan to add a fourth liquefaction train, in a move that will significantly increase LNG export capacity. The project has become a focal point for the energy sector’s renewed momentum. With global gas markets reshaped by supply insecurity and shifting demand patterns in Asia, Oman has a narrow but meaningful window in which to expand.
Renewable energy is advancing in parallel, with Oman preparing for a substantial pipeline of 4.5GW of solar independent power plants and roughly 1GW of new wind capacity by 2030. If delivered on schedule, this will reposition the sultanate as a regional leader in utility-scale renewables and lay the groundwork for its green hydrogen aspirations. The challenge will be to sequence projects in a way that maintains investor confidence while managing grid integration and regulatory clarity.
Construction, too, has gathered momentum. Contract awards have risen in the past three years, driven by infrastructure, industrial schemes and urban development. It is a sector that often serves as a bellwether for broader economic health – and in Oman’s case, the trajectory is largely positive. Oman is not racing to launch headline-grabbing megaprojects, though some of its recent master plans – such as Sultan Haitham City – have attracted attention for their reimagining of urban sustainability at a level of sophistication well above the Gulf industry standard.
Such developments are an apt metaphor for Oman’s broader diversification trajectory: the sultanate is building patiently and coherently, with an eye on resilience as much as on growth, and doing so within a defined budget. Amid uncertainty, it is a strategy that suits the times.
MEED’s January 2026 report on Oman includes:
> GVT & ECONOMY: Oman pursues diversification amid regional concerns
> BANKING: Oman banks feel impact of stronger economy
> OIL & GAS: LNG goals galvanise Oman’s oil and gas sector
> POWER & WATER: Oman prepares for a wave of IPP awards
> CONSTRUCTION: Momentum builds in construction sectorTo see previous issues of MEED Business Review, please click herehttps://image.digitalinsightresearch.in/uploads/NewsArticle/15242389/main.gif -
Oman pursues diversification amid regional concerns
31 December 2025
In late November, a batch of 36 wind turbines arrived at Oman’s Duqm Port, destined for the Riyah 1 and 2 projects being developed by OQ Alternative Energy. Each turbine can generate some 6.5MW – enough to supply 2,400 Omani homes – and yet, rather than being fed into the national grid, their output will be used by Petroleum Development Oman (PDO) to ramp up the use of renewable energy in its own operations. This will both reduce its carbon emissions and free up more gas for other purposes.
This combination of continued hydrocarbon exploitation and clean energy development is a familiar pattern around the Gulf. For Oman, it is also a sign of its efforts to diversify while making existing energy resources go further.
With the recovery of oil prices, Oman’s nominal GDP has surged by 41% from 2020 to 2024, according to the Washington-based IMF
Plans within plans
In 2026, the country will begin the 11th phase of its five-year cycle of its Vision 2040 development plan, in which both diversification and improved performance feature strongly. Ministry of Economy undersecretary Nasser Rashid Al-Maawali set out the objectives of the 2026-30 plan in a 24 November presentation to the State Council. Among the points he highlighted were a focus on building a diversified and sustainable economy, greater economic decentralisation and raising institutional performance.
The authorities can look back with some satisfaction on the10th plan, which began as Sultan Haitham Bin Tariq Al-Said was taking office in January 2020. Since then, the government’s finances have been turned around, with debt levels brought down and spending kept under control even as the economy as a whole has continued to grow. With the recovery of oil prices, Oman’s nominal GDP has surged by 41% from 2020 to 2024, according to the IMF, reaching $107bn at the end of that period.
Diversification remains a work in progress, but there has been positive movement. According to Capital Intelligence Ratings, non-hydrocarbon activity accounted for 72.4% of GDP in the first quarter of 2025, compared to 69.9% in 2020.
In a review of the economy issued in late November, the IMF had encouraging words for Muscat. The organisation’s mission chief for Oman, Abdullah Al-Hassan, said the economic outlook for the country was “favourable” and the coming five-year plan “presents an important opportunity to accelerate economic diversification, boost productivity and create more private sector jobs for Omanis”.
However, there are still vulnerabilities. Data from the Ministry of Finance for the third quarter of the year showed revenues falling and expenditure rising, amid subdued international oil prices and restrictions on output under the Opec+ arrangements.
Public revenue over the first nine months of this year totalled RO8.5bn ($22bn), an 8% decrease from the same period of 2024, with oil income down 13% and gas revenues down 4%.
Public spending meanwhile was up 2% over the period to RO8.9bn, leaving a small but noteworthy deficit. The shortfall was mainly due to capital expenditure, with ministries spending RO1.1bn on development projects, or 23% more than the RO900m that had been anticipated. Economists expect further budget deficits in the coming years, unless oil prices rebound.
Non-oil potential
Developing the non-oil economy remains a critical aspect of future growth, with key target sectors including tourism. Oman Air is considering ordering more planes in the new year, with chief executive Con Korfiatis saying at the recent Dubai Airshow “we will definitely need more” narrow-bodied jets. It is unclear if it will order new planes from Airbus or Boeing or look for second-hand jets on the lease market.
Green hydrogen is another significant area of activity for the future, although it remains to be seen if global demand will develop quickly enough to meet all the supply being planned, in Oman and elsewhere. According to the authorities, Oman is aiming to attract $140bn of investments in its green hydrogen sector by 2050.
In the shorter-term, a more prosaic list of sectors is generating growth. According to the IMF, the strong economic performance in the first half of 2025 was boosted by activity in the manufacturing, wholesale and retail, logistics, construction, and agriculture and fishing sectors. “Growth is projected to strengthen over 2025-26 as oil production cuts unwind and non-hydrocarbon activity continues to expand,” said Al-Hassan.
He urged further modernisation of the tax system, including the personal income tax on high earners, which is due to be introduced in early 2028. The IMF has also called for more cuts to spending, including phasing out untargeted energy subsidies.
Geopolitical risk
However, for all the progress made in expanding the economy and putting government finances on a surer footing in recent years, Oman cannot escape its neighbourhood. The IMF noted in its report that “renewed geopolitical tensions could weigh on growth and fiscal and external positions.”
This is something Omani officials are acutely aware of and it has informed the country’s long-standing role as a regional mediator.
Events in June threw that into sharp relief, when a planned sixth round of indirect talks between the US and Iran in Muscat were abruptly cancelled, after Israel launched a bombing campaign on Iran.
It was an event Oman’s Foreign Minister Sayyid Badr Bin Hamad Al-Busaidi focused on during his speech at the Manama Dialogue conference in Bahrain in early November. “We have long known that Israel, not Iran, is the prime source of insecurity in the region,” he said.
With Saudi Arabia now reportedly playing a more central role in mediating between the US and Iran, Oman’s position as a regional intermediary may now be reduced – at least in regard to that bilateral stand-off. But Muscat could still play an important role in helping to resolve the situation in Yemen, particularly as the Houthi’s main negotiator Mohammed Abdulsalam resides in Muscat.
“Failing to engage constructively and in good faith with Iran, with the Houthis and others, will not resolve issues like proxy wars, human suffering or nuclear proliferation,” Al-Busaidi told the audience in Manama. “On the contrary, exclusion fuels conflict, extremism and instability, worsening exactly these challenges. Only an inclusive regional security framework can effectively address shared challenges.”
A calmer geopolitical backdrop would also provide a more conducive environment for Omani economic development and diversification.
MEED’s January 2026 report on Oman also includes:
> BANKING: Oman banks feel impact of stronger economy
> OIL & GAS: LNG goals galvanise Oman’s oil and gas sector
> POWER & WATER: Oman prepares for a wave of IPP awards
> CONSTRUCTION: Momentum builds in construction sector
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UAE and Qatar emerge as markets to watch
30 December 2025
Heading into 2026, the UAE and Qatar lead the MEED Economic Activity Index, with both countries surging ahead of their peers buoyed by their bullish real GDP growth forecasts, sound macroeconomic fundamentals and expansionary project markets.
The UAE remains the region’s strongest economic performer, with real GDP expected to grow by 4.8% in 2025 and 5% in 2026, according to the IMF. Project award activity has held at more than $90bn in the past 12 months – matching the previous period and standing 75% above the average annual awards value of the past decade.
Awards also exceeded project completions by a ratio of 2.5:1, generating a $60bn positive net change and lifting the value of projects under execution by 25%.
Qatar has the region’s most bullish real GDP outlook, with its 2.9% growth in 2025 expected to accelerate to 6.1% in 2026, driven by a liquefied natural gas expansion and rising non-oil output. The projects market is also strengthening again after the post-2022 World Cup lull. Awards increased by 24% in the past 12 months, rising to 30% above the 10-year average and expanding the value of projects under execution by 8%.
The UAE remains the region’s strongest economic performer, with real GDP expected to grow by 4.8% in 2025 and 5% in 2026
Kuwait follows with a robust 2026 growth forecast of 3.9% and double-digit current account and fiscal surpluses (before contributions to the Future Generations Fund).
The suspension of parliament has enabled a revival in infrastructure spending after years of weak performance, driving a 50% rise in contract awards in 2025.
Recent awards have been four times the value of project completions, increasing the value of projects under execution by 29%.
Saudi Arabia has a real GDP growth projection of 4% for both 2025 and 2026. Despite strong fundamentals, the country has slid into current account and fiscal deficits, and pressure on spending has contributed to a 23% year-on-year decline in project awards.
Even so, the projects market remains buoyant, with award activity still 65% above the 10-year average – driving up the value of projects under execution by 8% in the past year.
Rising fortunes
Morocco has recently posted strong economic growth and project activity. Real GDP growth hit 4.4% in 2025 and is expected to be sustained at 4.2% in 2026 despite fiscal fragility and high unemployment. The projects market has stabilised at around $10bn in awards for the second year running – double the long-term average – lifting the value of projects under execution by 15%.
Oman’s real GDP growth is expected to increase from 2.9% in 2025 to 4% in 2026. Fiscal reforms have kept spending disciplined, but this has constrained project investment. Contract awards have fallen by 50% in the past 12 months, dropping below recent peaks and settling 15% under the long-term average.
Morocco's projects market has stabilised at around $10bn in awards for the second year running – double the long-term average
Jordan is set for just 2.9% real GDP growth in 2026, and continues to face severe fiscal pressures. However, January saw the landmark award of the $6bn Aqaba-Amman water desalination and conveyance scheme – by far the largest project in Jordan and expected to stimulate activity across industrial supply chains. Financial close for the scheme is anticipated by early 2026.
Struggling economies
Bahrain is currently the GCC’s weakest performer and is forecast to grow by only 3.3% in 2026, even as public expenses produce a double-digit fiscal deficit. Lower capital spending in the past 12 months has contributed to one of the weakest years on record for project awards, which fell to $1.4bn – 50% below the previous year and 60% under the long-term average. The completion of the $5bn Bapco modernisation project has driven a 38% drop in the value of projects under execution to $8.2bn.
Iraq is emerging from 0.5% growth in 2025 towards a much more positive forecast of 3.6% growth in 2026. Baghdad is spending heavily on projects, with more than $30bn contracts awarded in the past 12 months – double the long-term average, and for the second year running.
Egypt is in the opposite position, with a solid 4.5% growth forecast for 2026, supported by foreign investment inflows, but offset by a double-digit fiscal deficit and weakening capital spending. High consumer price inflation – at 20% in 2025 – continues to overheat the economy. Project awards have fallen by 40% in the past 12 months to sit 30% below the long-term average.
Baghdad is spending heavily on projects, with more than $30bn contracts awarded in the past 12 months – double the long-term average, and for the second year running
Tunisia, meanwhile, is forecast to record the weakest real GDP performance in 2026 at 2.1%. The country also faces 5.9% inflation and both current account and fiscal deficits. Project activity has improved, doubling year-on-year compared with previous years, but this is coming from a very low base.
Algeria ranks lowest in the index, with real GDP growth expected to fall to 2.9% in 2026, alongside a double-digit fiscal deficit. Contract awards have halved in the past 12 months, reaching 25% below long-term averages. The World Bank has flagged Algeria’s medium-term outlook as uncertain without structural reform.
About the index
MEED’s Economic Activity Index, first published in June 2020, combines macroeconomic, fiscal, social and risk factors alongside data from MEED Projects to provide an index score of the near-term economic potential of Middle East and North African markets.
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Investors focus on residential sector for new deals
29 December 2025
This package also includes: Saudi real estate to surge in 2026
A series of legislative changes were made in 2025 to facilitate further growth of the sector in 2026
Saudi Arabia’s real estate market continued to gather momentum at the Cityscape Global 2025 event, with a record SR237bn ($63.1bn) of deals signed.
The event was held on 17-20 November at the Riyadh Exhibition & Convention Centre and was inaugurated by Saudi Municipalities & Housing Minister Majed Al-Hogail.
Although the deals signed at the event signalled a modest increase in dollar terms from the $61bn reported in 2024, they underline a steady increase in commitments to Saudi Arabia’s wider ecosystem of tourism, healthcare, logistics and supporting infrastructure schemes.
A large share of the $63.1bn is tied to the development of housing and residential communities, reflecting continued policy support for home ownership and urban expansion. Tourism- and infrastructure-related agreements also featured heavily.
NHC signings
The headline of the event was the series of agreements worth billions of dollars signed by Saudi Arabia’s National Housing Company (NHC) with many local and international firms.
The company signed two agreements worth over SR8.5bn ($2.2bn) for the development of two mixed-use and residential communities in Riyadh. The first agreement, worth over SR5.2bn ($1.4bn), was signed with local developer Retal Urban Development Company for a total of 4,839 residential units in the Al-Fursan suburb of Riyadh.
The other contract, worth over SR3.3bn ($880m), was signed with a joint venture of Egypt’s Hassan Allam Holding and local developer Tilal Real Estate for a mixed-use project in the Khozam district. The development will cover over 228,000 square metres (sq m).
The headline of the event was the series of agreements … signed by Saudi Arabia’s NHC
NHC also signed an investment agreement worth over SR1bn ($266m) with Turkiye’s Emlak Konut to develop residential communities within the Mecca Gate project in Mecca. Emlak Konut will develop 1,000 residential villas.
A SR2.64bn ($702m) partnership agreement was also announced with Egyptian real estate developer Mountain View to launch a residential project in the Al-Fursan suburb in Riyadh. The development will span 930,000 sq m and comprise 1,923 units.
NHC also signed agreements with local developers. It inked a deal with Ledar Company to develop over 930 units within the Dar Makkah project in Wujhat Bawabat, Mecca, valued at SR899m ($240m), and another with Dar Wa Emaar Company for 2,843 units in Wujhat Al-Fursan, worth more than SR3.3bn ($879m).
A deal with Ezdihar Real Estate will deliver a further 1,120 units in Wujhat Al-Fursan, valued at over SR880m ($234m).
NHC also announced a SR600m ($160m) deal with Al-Omar Investment to develop 14,000 residential units at the Dama Al-Mashriqya project in East Riyadh.
A SR525m ($140m) contract was awarded to local firm Zaid Alhussain & Brothers Group for infrastructure works in the Khuzam area north of Riyadh, while Saleh Abdulla Almahana Company secured a SR651m ($173m) contract to build 1,290 units for the Rose House project in Al-Ahsa.
NHC also awarded Riyadh-based Alomaier Trading & Contracting Company a contract to carry out infrastructure works at its Khuzam residential development in Riyadh. The scope of work covers all infrastructure works across an area of 4 million sq m.
NHC also announced the construction of 1,085 villas within the Al-Ghoroub project in Medina.
More announcements
NHC’s signings were complemented by further deals announced by major developers and government entities.
> Diriyah: Saudi gigaproject developer Diriyah Company awarded two construction contracts with a combined value of over SR5.7bn ($1.5bn) on the sidelines of the event.
The first, valued at about $800m, was awarded to the local BEC Arabia Contracting Company for the construction of offices in the Media and Innovation district of the Diriyah development. Within the same district, BEC Arabia will also build residential assets on the Manazel Al-Hadawi plots.
The other contract, estimated to be worth $900m, was awarded to local firm Almabani General Contractors for the main construction works on King Khalid Road.
> King Salman Park: The King Salman Park Foundation, Ajdan Real Estate and Sedco Capital announced a partnership agreement to build a SR3.8bn ($1bn) mixed-use real estate project within King Salman Park in Riyadh. The project will feature over 600 residential units, 200 hotel rooms, 45,000 sq m of office space and retail and service facilities covering 106,000 sq m.
> Urubah Investment: Local firm Urubah Investment unveiled a 53-floor residential and commercial tower in Riyadh’s Al-Yasmin district, with a built-up area of 160,000 sq m.
> Zood Real Estate: The firm announced the launch of a 10-tower mixed-use project on Riyadh’s Northern Ring Road.
> Ajdan Real Estate: The developer launched the Ajdan Infiniti complex and signed a financing agreement with Alawwal Bank. It also launched the Ajdan Towers project in Riyadh.
> Masar: Jeddah-based Masar sold three plots of land in its Masar Destination in Mecca for the construction of residential and hotel towers, with investments reaching SR1.6bn ($426m). It also signed an agreement for two plots for the development of two residential towers, with investments exceeding SR1bn ($266m).
Masar also signed a land sale deal for a 500-unit hotel tower, with total investments exceeding SR1bn ($266m), and a SR700m ($186m) land reservation agreement with Al-Diyar Al-Arabiya to develop a 300-unit residential tower.
> Mohammad Al-Habib: The developer launched a $1.3bn mixed-use project in the north of Riyadh.
> Al-Awaly: Jizan-based firm Al-Awaly announced signing a contract to establish Jazan Water City on an area of 114,000 sq m with an investment value of SR200m ($52m).
> Alothaim: The firm announced the launch of three mixed-use projects in Dammam, Medina and Khamis Mushait.
> Al-Majdiah Development: The firm signed a memorandum of understanding (MoU) with Alinma Bank to develop financing solutions that support its future projects.
> Roshn Group: The Saudi gigaproject developer signed partnership agreements for educational and residential developments and the localisation of supply chains. These include an MoU with the UK’s Cognita Schools to develop a private school in its Sedra residential community in Riyadh.
On the residential side, Roshn launched Sedra Residence, the construction contract for which has been awarded to Building Construction Company.
Roshn was also granted the first instant licence for off-plan sales projects.
In addition, local developer Maskan purchased land in Roshn’s Al-Arous community in Jeddah. Maskan will develop a mixed-use project at an investment of SR1.7bn ($453m).
> Sedco Capital: The firm signed agreements to develop a 540-unit residential complex and a 200-unit residential tower, with total investments of SR1.8bn ($479m). Sedco also signed a deal to develop a Courtyard by Marriott-branded hotel with 1,100 rooms within the Masar Destination in Mecca.
> Saudi Real Estate Refinance Company: The firm signed an agreement with Al-Rajhi Bank to purchase two real estate financing portfolios worth SR10bn ($2.6bn).
> Osus Real Estate: The developer launched two mixed-use projects in the Al-Malqa and Al-Qayrawan districts of Riyadh, with a total investment of about SR3bn ($800m).
> Liwan Real Estate: The firm launched a 151,300 sq m project comprising 2,500 residential units, along with a hotel, offices and commercial facilities, at an investment of SR4.5bn ($1.2bn).
> Kooheji Developments: The firm launched a three-tower development with 1,250 units, located in Al-Khobar.
> Bank Albilad: The bank launched a SR4.4bn ($1.1bn) fund to develop a mixed-use project in the Qurtuba district of Riyadh.
> SAB Invest: Together with Dallah Health and Aljazira Capital, SAB Invest will develop medical, commercial and hotel facilities near Dallah Al-Nakheel Hospital in Riyadh at an investment of SR1.2bn ($319m).
> Heyazah: The firm announced a mixed-use project spanning 103,000 sq m in the vicinity of King Salman Park in Riyadh.
> Riyad Capital: The investment company launched a SR1.7bn ($453m) fund to develop the One Mountain View project, featuring over 500 villas in the north of Riyadh.
> Al-Basateen: The developer launched the Al-Basateen Tower project at the intersection of Riyadh’s Northern Ring Road and King Fahd Road.
> Alinma Bank: The bank launched a fund worth SR3bn ($800m) to develop 2.7 million sq m of land in the Al-Janadriyah district of Riyadh.
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Saudi real estate to surge in 2026
29 December 2025
This package also includes: Investors focus on residential sector for new deals
Deals worth $63.1bn were signed at the Cityscape Global 2025 property show in Riyadh
After nearly a decade of Saudi sovereign wealth vehicle the Public Investment Fund (PIF) taking on the delivery burden of the kingdom’s largest projects, Riyadh is now turning to private sector real estate developers to help deliver its ambitions.
The shift reflects both opportunity and necessity. The PIF-led model has enabled Saudi Arabia to fast-track its gigaprojects and anchor Vision 2030’s transformation objectives. Riyadh is now looking for the private sector to maintain this momentum.
Opening the market
To encourage more real estate activity, the kingdom’s long-awaited foreign ownership law was approved in August 2025. It will come into force in early 2026 after a 180-day implementation period. It introduces a comprehensive structure for non-Saudi ownership of real estate.
The law allows non-Saudi individuals and companies to own, lease and use property in designated areas, subject to restrictions by type and location. Foreign residents can own one home for personal use outside restricted zones, excluding Mecca and Medina. Meanwhile, companies with foreign shareholders can acquire real estate across the kingdom, including in Mecca and Medina, provided it is for business purposes or employee housing and in line with financial regulations.
The intention is to help Saudi Arabia tap into international property demand – as Dubai has done – to boost foreign direct investment (FDI).
In 2024, the kingdom attracted SR119bn ($31.7bn) in FDI, up 24% year-on-year and 37% above earlier estimates, but still short of the $100bn annual target for 2030.
Manufacturing led inflows with SR35bn, followed by wholesale and retail trade, construction and financial and insurance services. Real estate did not feature among the top-performing sectors, underlining the potential for growth.
Land and finance
While the foreign ownership law focuses on demand, the revised white land tax regime, effective from 22 August 2025, targets supply. The law aims to curb land hoarding, boost urban land availability and support development priorities.
Key provisions include an annual white land tax of up to 10%, with zones graded between 10% and 2.5%; a vacant building fee of up to 5%, potentially rising to 10%, subject to approval by Saudi Arabia’s Council of Ministers; and the classification of cities according to supply-demand conditions and development needs.
The white land tax is likely to have a dual effect. It should prompt some landowners to bring idle plots into development, sell to active developers or enter into partnerships, thereby alleviating a long-standing structural bottleneck in Riyadh and other major cities. At the same time, it introduces a new cost for holding undeveloped land, which will need to be priced into feasibility studies and could initially push some asking prices higher as owners seek to pass on part of the burden.
Over time, if enforcement is seen as consistent and predictable, the white land tax could help normalise more active land markets and support the private sector’s expanded delivery role. But 2026 is likely to be a transitional year, with a mix of opportunistic sales, legal challenges and recalibrated land valuations.
The government has also intervened directly in the rental market, most notably with a rent freeze in Riyadh.
In response to double-digit rent increases in some districts, driven by non-oil growth, gigaprojects and corporate relocations, the authorities have imposed a five-year suspension of annual rent increases for residential and commercial leases in the capital.
For tenants, the freeze offers immediate relief and increases predictability, particularly for middle-income households and small businesses exposed to volatile rents. It also serves as a counterweight to fears that opening the market to foreign buyers in 2026 will drive another surge in rental prices.
For investors and developers, however, the impact is more challenging. Compressed rental growth in Riyadh reduces the upside on income-producing assets, especially where financing structures assumed steady nominal increases.
Running alongside these regulatory reforms is a quieter but significant development in real estate finance: the launch of Saudi Arabia’s first residential mortgage-backed securities by PIF subsidiary the Saudi Real Estate Refinance Company. This new asset class aims to enhance liquidity in the housing finance market and diversify investment opportunities.
In the longer term, a thriving, diversified real estate sector underpinned by such instruments can support the development of a broader ecosystem of mortgage issuers, servicers and investors, reducing systemic risk and broadening access to housing finance.
As the kingdom takes deliberate steps to open its market to foreign buyers, mobilise idle land, protect tenants and strengthen financial infrastructure, much will depend on execution. If the new foreign ownership rules are applied effectively, 2026 could mark the start of a more sustainable, private sector-led growth phase. If not, uncertainty could dampen the very investment the reforms aim to attract.
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