KSA Market Q2 2021

The Saudi construction industry has felt the Currently, essential infrastructure networks Basis/assumptions/exclusions
impact of the Covid-19 pandemic perhaps are being procured, and the construction
more acutely than other regions. The industry anticipates that significant tenders in 1. All costs derived from Currie & Brown's in-house database
Hospitality Healthcare (Abacus) and project experience.
implementation of restrictions in the Kingdom the residential and commercial sectors will be
led to targeted government cost-saving floated in the last quarter of 2021 and through 2. Rates have been calculated based on the GIFA measurement as
measures, including reduced expenditure on to the first half of 2022. Asset description Low High Asset description Low High defined by the RICS Code of Measuring Practice 6th Edition.
(SAR/m2) (SAR/m2) (SAR/m2) (SAR/m2)
giga-project investment. 3. Rates include for hard construction costs only.
As international travel opens up, the Upper-midscale 7,000 8,900 Hospital 10,000 14,000
4. Rates are current as of Q2 2021.
Positive outlook Kingdom’s tourism sector will need to be
Upscale 9,500 10,900 Clinic 12,000 14,500
prepared to meet the anticipated high 5. Rates include contractor's general requirements.
To date, more than 17 million vaccine doses
demand arising from the introduction Upper-upscale 11,200 12,400 6. Rates exclude:
have been administered in the Kingdom. By
of tourism visas. The impact will be felt Luxury 12,800 14,500 Contingencies
the end of 2021 a significant proportion of ■
by both existing and new infrastructure Inflation beyond Q2 2021
nationals and expatriates with Iqamas will be Ultra luxury 14,800 18,200 ■
requirements, in addition to demand for hotel Other amenities
fully vaccinated. ■ Material fluctuation beyond Q2 2021
accommodation and facilities.
■ Soft costs, such as, but not limited to, professional fees, local
Despite last year’s drop in construction
contract awards, the feeling in the industry Increasing commodity costs Hotel - Branded/ International school 3,500 6,000
authority fees, legal fees, sales and marketing costs or pre-
opening costs
remains positive. The accepted forecast is Alongside the above, construction commodity
serviced apartments Mosque 5,000 9,000 ■ Land costs
that as the impact of the global pandemic costs are anticipated to increase, continuing
■ Finances costs
crisis passes, the construction sector will the rising prices of building materials,
recover. Encouraging signs include the especially steel, cement and copper that was Branded/serviced 6,000 11,000 ■ Client direct costs
increasing number of contract awards over seen in the first quarter of 2021. apartments ■ White goods, loose FF&E or OS&E as applicable
the past six months. Car parking ■ VAT
Given the progression of the giga-projects
7. Rate assumes a traditional build-only procurement route with
Sector-specific opportunity across the Kingdom, it is anticipated that in
works being undertaken by reputable main works contractors.
Independently of the anticipated tourism,
the near future a shortage of skilled labour Residential - Car parking - basement/ 3,000 3,800 8. The stated rates are indicative and should not be used or relied
wellness and entertainment giga-projects
and raw materials will have an additional Villa underground upon in lieu of a detailed project-specific cost estimate.
impact on construction unit rates, with the
progressing throughout KSA, other key Car parking - above-ground 1,800 3,100
progression of future projects based on
sectors are anticipated to include residential Villa standard 3,000 4,200 structure
supply and demand.
and commercial.
Villa mid-market 3,500 5,300 Car parking - podium with 2,050 3,450
Currie & Brown has been commissioned to
In particular, housing developments are likely
to be an area of focus in the Kingdom.
assess alternatives to traditional construction Villa upper-mid market 4,500 7,500
1.2m exposed above grade Integrated services
methods with the aim of mitigating against Car parking - on grade 500 1,200
It is estimated that more than 65% of the the risks of a labour shortage, while Villa luxury 7,500 10,000 Project and programme management
Saudi workforce is made up of individuals maintaining focus on the Vision 2030 targets. Cost management
aged 25-44. Planned housing programmes, Our benchmarks will be regularly updated to Contract advisory services
including affordable schemes, will need to take into consideration the market, relevant
cope with this demand, independently of the tender returns impact, and/or any shortage of
Landscape Design management
Residential - Apartment
residential schemes planned within the giga- skilled labour and material impact. Project controls and planning
projects. Park (hard landscape) 400 750 Procurement advice
Apartment - low rise 3,500 6,500
Park (soft landscape) 350 650 Facilities management consultancy
Apartment - mid rise 3,950 7,300
Apartment - high rise 4,550 9,000

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