The building superpower

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Saudi Arabia has braved one of the worst financial crises the world has seen and is forging ahead with some of the biggest projects in the GCC. But where is this giant heading and is it really all that strong?

With real estate investments in the kingdom touching US $334 billion (SAR1.2 trillion) currently, and further estimated to reach $400 billion by 2010, according to the lastest research by Global Investment House (GIH), can Saudi Arabia be called the sleeping giant anymore?

Its $40 billion Sudair City development, along with its $10 billion Landbridge Railway project, which are both currently in bidding, are witness to this GCC state’s resilience to the economic downturn.

In another report by research house Proleads, Saudi Arabia is placed on top, in terms of the number of ongoing projects in the kingdom, with 442 projects still proceeding and a rather low 19% cancellation and postponement rate.

A fortnight ago, GIH also revealed that the demand for business and housing projects in Saudi Arabia has led to a projected 7% growth in the kingdom’s real estate sector from now until 2012 – a time during which most countries would merely be recovering from the effects of the crisis.

Further, recent reports have shown that if the kingdom wants to sustain its rapidly growing population it needs to build around 1.5 million new homes by 2015, which is around 250,000 housing units annually. These figures are further broken down city-wise including Al Khobar with a 25% increase in housing demand, 21% in Jeddah and around 17% in Riyadh. Jeddah is also looking to invest more than $1.3 billion in the construction of bridges, tunnels, roads and parks.

But while Saudi Arabia appears to have escaped the clutches of the evil crisis, one cannot deny the many projects that have been cancelled across the GCC, including a few within Saudi Arabia. But that is not beyond normal says Dammam-based GTSC general manager, Husain Al Omani.

“You will find that many projects have already been signed, including billion dollar ones by Saudi Aramco, Saudi Electric Company and Sabic, along with various other ongoing infrastructure jobs in the kingdom. Yes, some projects are on hold but that’s because they’re backed by companies based outside Saudi Arabia and may have been affected by the downturn. But no major projects have been cancelled,” he added.

And Omani isn’t the only one who feels confident about the Saudi market. Big Saudi construction companies are still picking up jobs in the country and have said they have no reason to look elsewhere just yet.

“There is so much work in Saudi Arabia that we still have the option to decide if we want to take a job or not,” says Jeddah-based Saudi Binladin Group (SBG) corporate development director Ahmed Anees. “And that is a luxury most countries within the GCC and the world over do not have. That in itself is testament to the strength of the Saudi Arabian market.”

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