$20bn Saudi projects cancelled, delayed

Less than 80 active projects, with a total value of around $20bn, have been put on hold or cancelled in Saudi Arabia, Dubai-based research house Proleads Group said on Sunday.

By contrast, more than 400 projects with a total value of over $300bn have been suspended or cancelled in the UAE, Proleads said last week.

The Saudi study examined more than 720 construction projects with a total budget of more than $430bn across the commercial and retail; education and healthcare; leisure and entertainment; and residential sectors.

“The economic crisis has not had a great effect on the rate at which projects have been cancelled in Saudi Arabia,” said Emil Rademeyer, director of Proleads Global.

Cashflow in the Saudi construction industry grew throughout 2008 and stabilised in 2009.

“The market in Saudi Arabia is expected to maintain current levels throughout 2010, although slight decline is expected in the education and healthcare sectors countered with an expected slight growth in commercial and retail,” Rademeyer said.

Residential projects made up the biggest share of the market in terms of value but education and healthcare had the most projects.

Significant project completions are expected in 2011, Proleads said.

A less open economy, restrictions on foreign ownership and a smaller expatriate population has meant Saudi Arabia largely avoided the real estate bubble that sent property prices tumbling in the UAE.

The government in December announced a SAR475bn ($126.7bn) economic stimulus package for 2009.

Real estate consultancy Jones Lang LaSalle has said the Kingdom’s burgeoning young population means the country will face a housing shortage of up to one million homes over the next three years.

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