KSA Construction Cost

Benchmarking - Q1 2020
KSA market
Over the next ten years there will be significant growth in the
construction market in KSA, accelerated by the award of the known
giga-projects coupled with the growth in private developer markets.
Residential - Commercial
Villa property Landscape In alignment with Vision 2030, the country's giga-projects are
now transitioning into the next stage of their development. It is
Asset description Low (SAR/m2) High (SAR/m2) Asset description Low (SAR/m2) High (SAR/m2) Asset description Low (SAR/m2) High (SAR/m2) anticipated that during 2020 some of the relevant assets’ designs
will be finalised and issued to the market. It is expected that only
Villa standard 3,000 4,200 Commercial office - 4,900 8,000 Parks (hard landscape) 400 750
early/enabling/infrastructure works will be awarded this year.
Villa mid-market 3,500 5,000 stand alone Parks (soft landscape) 350 650
Commercial office - 8,400 11,500 In the event that all known portfolios materialise, the construction
Villa upper mid-market 4,500 7,500 market is expected to boom, which will place additional pressure
stand alone - grade A
Villa luxury 7,500 10,000 Basis/assumptions/exclusions on contractor capacity, including their workforce, and cause a
Commercial office - 5,200 8,250 potential shortage of materials.
business park - 1. All costs derived from Currie fees, local authority fees,
& Brown's in-house database legal fees, sales and Currie & Brown’s Q1 2020 benchmarks only reflect the market at
core and shell
Residential - and project experience marketing costs or pre- the referred quarter, and potential alterations to these benchmarks
Apartment Commercial office - 8,700 11,750 2. Rates have been calculated opening costs are expected to occur during this year. This is as a result of the
business park - grade A based on the GIFA ■ Land costs commencement of the known giga-projects in KSA as well as the
Apartments - low rise 3,500 6,500 measurement as defined by ■ Finance costs potential impact of the coronavirus pandemic, the latter being too
the RICS Code of Measuring early to determine.
Apartments - mid rise 3,950 7,300 ■ Client direct costs
Practice 6th Edition
White goods, loose FF&E With oil prices forecast by the Energy Information Administration
Healthcare
■
Apartments - high rise 4,550 9,000 3. Rates include for hard
or OS&E as applicable in February 2020 to remain in the $60-per-barrel range, 2020
construction costs only
4. Rates are current as of Q1
■ VAT was already going to be a difficult year across the Gulf region.
Hospital 10,000 14,000
2020 7. Rate assumes a traditional The Saudi government’s own budget forecasts a fiscal deficit at
Clinic 12,000 14,500 build only procurement route 6.5 per cent of GDP for 2020, to be filled with reserves, loans or
5. Rates include contractor's
Hospitality general requirements
with works being undertaken bond issues. The price per barrel is nowadays lower than 50%
by reputable main works of the forecast range and the impact of this effect on the Saudi
6. Rates exclude: contractors
Three-star hotel 6,800 9,200 Other government’s budget is still to be determined.
■ Contingency 8. The above rates are indicative
Four-star hotel 7,500 11,500 amenities ■ Inflation beyond Q1 2020 and should not be used In light of the negative impact of the coronavirus pandemic on
Five-star hotel 9,000 14,200 or relied upon in lieu of a public finances in the Kingdom, Saudi Arabia is to cut circa SAR50
International schools 3,500 6,000 ■ Soft costs such as but not
limited to: professional detailed project-specific cost billion from this year’s public sector budget. The cut is less than
Mosques 5,000 9,000 estimate five per cent of the overall budget and is expected to be in areas
that have the least social and economic impact. In accordance
Hotel - Branded/ with latest news from governmental agencies, given the potential
impacts of the coronavirus outbreak, future developments are to be
serviced apartments Car parking Integrated project management reassessed, expenditure reviewed, and appropriate decisions to be
Branded/serviced apartments 6,000 11,000 Car parking - basement/ 3,000 3,800
Project management made in a timely manner.
underground Construction management and site supervision These benchmarks will need to be regularly updated to take into
Car parking - above- 1,800 3,100 Project controls and planning consideration the market, relevant tender returns impact, and/or
any shortage of skilled labour and material impact.
ground structure Cost management
Retail Car parking - podium 2,050 3,450 Commercial and contract management
with 1.2m exposed Procurement services
Regional mall 4,500 7,000
above grade
District mall 4,000 6,500 Design management Contacts
Car parking - on grade 500 1,200
Contract advisory services
Spencer Wylie
Facilities management consultancy Managing Director - Northern Gulf
E spencer.wylie@curriebrown.com

James Irvine
Director/Country Manager
A world-leading asset management E james.irvine@curriebrown.com
and construction consultancy Francisco Batista
driven by innovation
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Associate Director
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