meed-logo

line1 line2 line3
SIGN IN / REGISTER

Opening up property sales in Saudi Arabia

29 May 2024

The June 2024 Agenda package also includes:

> Riyadh reins in spending
> PPP offers budget and efficiency routes
> Aramco explores PPP pathway

 

 

One way that many of Saudi Arabia’s project developers can fund their projects is through property sales.

This business model has been used to great effect in other regional markets, most notably Dubai, where major projects such as the Palm Jumeirah, Downtown Dubai and the Burj Khalifa have all been developed using inflows of cash from property sales – much of which has been to foreign investors.

The challenge for Saudi Arabia is that its renewed drive for investment comes at a testing time for the kingdom’s property market. The total number of real estate transaction volumes across all asset classes in the country decreased by 17% in 2023 to about 177,000, according to a report by property consultancy Knight Frank.

The total value of deals also fell by 9% to SR197.7bn in 2023, mainly due to a 16% fall in the number of residential transactions, which accounted for 58.7% of all real estate deals by value.

The firm says the contraction appears to be due to reduced affordability and evolving market dynamics, as the kingdom has achieved record house price growth. Borrowing has also become more expensive, especially outside Riyadh, where lower average monthly earnings make the transition to property ownership more challenging.

Growth could be boosted by a foreign ownership law

The capital is the only sub-market in the country that has defied the trend, as transaction volumes increased by 7% compared to 2022. Riyadh is receiving a rising number of expatriate workers and an influx of workers from other parts of the kingdom as project activity ramps up in the city.

Government targets

Real estate is already a vital element of the Saudi economy, contributing about 7% of GDP in 2021, and the government aims to increase this to 10% by 2030. The objective is to increase homeownership by Saudi nationals to 70% by 2030, from 63.74% in 2023. 

Much of the growth has now been realised. When the homeownership targets were introduced in 2016, the percentage was just 47%.

The growth could be boosted by a foreign ownership law. In 2003, Dubai demonstrated the power of unleashing pent-up demand for property, and there has been speculation over the past year that Riyadh could introduce new legislation. 

At the Saudi Cityscape property exhibition in Riyadh in September 2023, project developers, including gigaproject companies, discussed the imminent implementation of a new law. If those expectations are realised, then real estate could be an even more important driver for project activity in the kingdom.

By Colin Foreman and Yasir Iqbal 

MEED's April 2024 special report on Saudi Arabia includes:

> GVT & ECONOMY: Saudi Arabia seeks diversification amid regional tensions
> BANKING: Saudi lenders gear up for corporate growth
> UPSTREAM: Aramco spending drawdown to jolt oil projects
> DOWNSTREAM: Master Gas System spending stimulates Saudi downstream sector
> POWER: Riyadh to sustain power spending
> WATER: Growth inevitable for the Saudi water sector
> CONSTRUCTION: Saudi gigaprojects propel construction sector
> TRANSPORT: Saudi Arabia’s transport sector offers prospects

 

https://image.digitalinsightresearch.in/uploads/NewsArticle/11823753/main.gif
MEED Editorial

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Egypt signs $420m Gabal El-Zeit wind agreements

    10 June 2026

    Egypt has signed agreements worth $420m for the investment, operation and power purchase of the 580MW Gabal El-Zeit wind power complex in the Red Sea region.

    Gabal El-Zeit 1 has a capacity of 240MW, while Gabal El-Zeit 2 and 3 have capacities of 220MW and 120MW, respectively.

    The agreements were signed between Egypt’s New and Renewable Energy Authority (NREA), the Egyptian Electricity Transmission Company (EETC) and Dubai-based Alcazar Energy.

    Under the agreements, Alcazar Energy will invest in, operate and manage the farms through a project company established under Egyptian law.

    The company will be responsible for technical operations, maintenance and efficiency upgrades while maintaining a minimum capacity of 580MW throughout the contract period.

    The Egyptian Electricity Transmission Company will purchase the electricity generated by the plant.

    The agreements follow earlier efforts to privatise the Gabal El-Zeit wind complex, involving a deal with UK-headquartered private equity firm Actis.

    According to the Egyptian government, the project supports the country’s state ownership policy and national energy strategy, which aim to increase the share of renewable energy in the electricity mix to 45%.

    The Gabal El-Zeit area on Egypt’s Red Sea coast is one of the country’s most established wind power development zones. The latest Gabal El-Zeit wind farm was completed in 2014, according to MEED Projects data. Germany’s Siemens Gamesa was the main contractor. 

    > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17170360/main.jpg
    Mark Dowdall
  • Majid Al-Futtaim awards $545m Ghaf Woods contract to ECC

    10 June 2026

    Majid Al-Futtaim Properties has appointed Engineering Contracting Company (ECC) as the main contractor for the Capria East, Capria West and Maravelle Residences developments at its Ghaf Woods community in Dubai, in a deal valued at AED2bn ($545m).

    The contract covers the construction of one-, two- and three-bedroom apartments and duplex residences across the two Capria clusters.

    The award adds to a series of major construction contracts Majid Al-Futtaim has issued across its Dubai communities in recent years.

    In May, local contractor Al-Sahel Contracting was awarded a AED700m contract for the Distrikt development, also at Ghaf Woods.

    In 2024, Majid Al-Futtaim awarded AED3bn in contracts for its Tilal Al-Ghaf community, appointing Innovo Build to build 94 waterfront villas at Elysian Mansions and United Engineering Construction (Unec) to deliver 130 villas at the Alaya development.

    > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17170744/main.jpg
    Colin Foreman
  • Saudi Arabia and Turkiye sign railway agreements

    10 June 2026

    Register for MEED’s 14-day trial access 

    Saudi Arabia and Turkiye have signed two memorandums of understanding (MoUs) to strengthen bilateral cooperation in the railway and logistics sectors, advancing Riyadh’s ambitions to become a global logistics hub.

    Transport and Logistics Services Minister Saleh Al-Jasser and Turkish Transport and Infrastructure Minister Abdulkadir Uraloglu signed the agreements at the ministry’s headquarters in Riyadh on 9 June, following ministerial talks held with a high-level Turkish delegation. Transport General Authority president Fawaz Al-Sahli and officials from the kingdom’s transport and logistics sector were also present.

    Agreement scope

    The first MoU covers logistics services and operations, including the exchange of expertise, policies and regulations. The second focuses on railway technologies, signalling and communication systems, railway digitalisation, human capacity development, the localisation of the railway industry and measures to reduce the sector’s environmental impact.

    More broadly, the agreements cover cooperation on railway standards and related innovations, the exchange of expertise on the design, operation and maintenance of rail projects, and engineering, infrastructure and safety standards.

    The two sides will also cooperate on research and development, with provision for joint workforce training through specialist railway academies.

    Riyadh said the agreements will help support its National Strategy for Transport and Logistics Services and Saudi Vision 2030, which seeks to position the kingdom as a logistics bridge connecting three continents.

    Turkish projects

    Turkish contractors have already established themselves as key players in the region’s rail sector. In 2012, Yapi Merkezi secured a $2.1bn contract for work on the Haramain high-speed rail network in Saudi Arabia, while Turkish firms Mapa and Limak are leading the ongoing civil works on Dubai’s $5.5bn Metro Blue Line project as part of a China Railway Rolling Stock Corporation (CRRC) consortium. Turkish consultancy Proyapi Muhendislik ve Musavirlik Anonim Sirketi has also won design contracts for the 111km Kuwait National Rail Road project.

    The agreements signed by Saudi Arabia and Turkiye may also give momentum to longstanding discussions around a rail corridor linking the GCC with Turkiye. The route, which has been discussed for years, has gained renewed impetus in recent months as the effective closure of the Strait of Hormuz has pushed regional governments to accelerate the development of overland trade alternatives.

    READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

    GCC looks beyond the Strait; Iraq’s reform window narrows as fiscal assumptions shatter; MEED Top 100 companies.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17169958/main.gif
    Colin Foreman
  • Joint venture tenders Algeria field development contract

    10 June 2026

     

    Register for MEED’s 14-day trial access 

    Hassi Bir Rekaiz Group (GHBR), which operates Algeria’s Hassi Bir Rekaiz field, has issued a tender for phase 2A of the asset’s field development project.

    GHBR is a joint venture of Algeria’s national oil and gas company Sonatrach and Thailand’s national exploration and production company PTTEP.

    The scope of the contract focuses on the “provision of engineering and supervision services”, according to documents published by Sonatrach.

    The tender has been issued with a bid deadline of 16 June 2026.

    In May, GHBR signed a $1.1bn contract for phase two of the Hassi Bir Rekaiz development project.

    The contract was won by a consortium of Egypt’s Petrojet and Italian engineering and contracting company Arkad.

    Petrojet’s portion of the project was estimated to be worth around $600m, and Arkad’s portion was estimated to be worth $500m.

    The contract used the engineering, procurement, construction and commissioning model.

    The scope of the project contract is focused on the construction of a central processing facility (CPF) capable of processing crude oil and associated gas.

    It also includes developing off-plot pipelines, as well as related utilities and infrastructure.

    The CPF will have the capacity to process 32,000 barrels a day (b/d) and will be designed to support future expansions.

    The related infrastructure will include an extensive pipeline network spanning approximately 217 kilometres, as well as a road network.

    READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

    GCC looks beyond the Strait; Iraq’s reform window narrows as fiscal assumptions shatter; MEED Top 100 companies.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17163750/main3325.jpg
    Wil Crisp
  • Algeria extends deadline for urea-formaldehyde project

    10 June 2026

     

    Algeria’s national oil and gas company Sonatrach has extended the bid deadline for a project to develop a new concentrated urea-formaldehyde unit in its Arzew industrial zone.

    The latest bid deadline is 15 June.  

    The contract uses the engineering, procurement, construction and commissioning model, and the bid deadline for technical tender submissions was originally set for early April.

    The condensed urea-formaldehyde unit will be located at the CP1-Z facility.

    The CP1-Z facility began operations in 1975 and has a capacity of 152,000 tonnes a year. It produces products including methanol, resin and formol.

    It is a two-phase tender. The first phase is a technical bid submission, and the second phase is a commercial bid submission.

    To be eligible to win this contract, companies must specialise in petrochemical industrial installation projects.

    They also need to have a share capital of at least $7m and more than 15 years of relevant experience.

    The new unit, UFC85, will have the capacity to produce 40,000 metric tonnes of concentrated and condensed urea-formaldehyde annually.

    The project’s scope also includes the development of auxiliary equipment and installations.

    Urea-formaldehyde has a wide range of uses, including the production of laminates, textiles and paper.

    In the wood industry, it is used as a thermosetting adhesive to bond wood to create plywood and particleboard. In agriculture, urea-formaldehyde is widely used as a slow-release fertiliser.

    READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

    GCC looks beyond the Strait; Iraq’s reform window narrows as fiscal assumptions shatter; MEED Top 100 companies.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17163657/main.jpg
    Wil Crisp