CONNECTING THE KINGDOM HOW SAUDI ARABIA’S KING ABDULLAH FINANCIAL DISTRICT EMBODIES THE 15-MINUTE CITY ITP MEDIA GROUP / BUSINESS VOL.2 2023 • ISSUE 001KCG is always keen about environment and works towards decreasing its impact on the planet. P.O. Box 5338, Jeddah 21422 KSA +966 12 627 8444 +966 12 62 78333 KCG Western Region P.O. Box 58951, Riyadh 11515 KSA +966 11 292 8444 +966 11 292 8111 KCG Central Region P.O. Box 6897, Dammam 31452 KSA +966 13 892 3444 +966 13 859 0289 KCG Eastern Region KCG participates in reducing greenhouse gas emissions, carbon footprint, and global warming emissions by: • Providing sustainable building & facility solutions. • Implementing digital cloud solutions & digital construction applications. • Promoting the use of robotics. • Relying more on local resources.CONTENTS VOL. 2 2023 • ISSUE 001 14 08 06 5 THINGS From contract awards to megaproject launches, we run down ve major things you should know about Saudi Arabia’s construction and real estate industry 08 OPINION Saudi Arabia is positioning the construction sector for strong growth amid global economic headwinds, Kobus Havemann comments 20 SECTOR ANALYSIS How construction across key sectors, including energy, transport, tourism, and healthcare could win from the ambitious Vision 2030 24 CW KSA AWARDS We wrap up the coverage of Construction Week KSA Awards that was successfully concluded on 09 November at Crowne Plaza Riyadh RDC 2024 06 COVER STORY How PIF-owned King Abdullah Financial District (KAFD) has been propelling Riyadh’s economy to new heights as the new nancial hub and a a premier business and lifestyle destination, CEO Gautam Sashittal shares key insights 34 After successfully wrapping up the 2022 event line-up, Construction Week Saudi is gearing up for more exciting events in 2023. As we step into 2023, we are excited to host once again industry leading events: from our Leaders in Construction conference series in the Kingdom of Saudi Arabia, Infrastructure Summit, and annual construction industry awards. EVENTS For information on conferences in 2023, contact Daniel Fewtrell, Director of Awards & Marketing (daniel.fewtrell@itp.com). For all award-related inquiries, please contact Anthony Chandran, Marketing and Events Manager (anthony.chandran@itp.com). If you want to be one of our partners and take advantage of our sponsorship opportunities, please contact Anup Nagpurkar, Commercial Director (anup.nagpurkar@itp.com) or Moutaz Gadelhak, Senior Sales Manager (moutaz.gadelhak@itp.com). EVENTS 2023| EDITOR’S LETTER | 5 A nation being built Ranju Warrier Editor in Chief Saudi Arabia has entered a new era of development. With its Vision 2030 initiatives in place, the kingdom embarks on a journey of transformation. As a catalyst driving this transformation the construction sector has a major role to play in the diversification of the nation’s economy. Over the years, the kingdom has directed a significant portion of its investment toward a pipeline of mega and gigaprojects such as NEOM, AMAALA, The Red Sea Project, ROSHN, Diriyah Gate, Qiddiya, and others. This has reflected strongly on the ambitious vision and supported the realignment of overall economic landscape of the kingdom led by HRH Crown Prince Mohammed Bin Salman Al Saud. In its Q4 2022 KSA Construction Market Intelligence Report, JLL indicated that Saudi Arabia’s construction industry continues to lead the MENA region despite macroeconomic conditions impacting the sector globally. As the report suggests, the kingdom witnessed the highest value of project awards in 2022, taking a 35% market share with a recorded $31 billion worth of contract awards against an overall MENA total of $87 billion. The kingdom’s aim for a thriving society places a strong emphasis on the real estate industry. Saudi Arabia has taken attempts to change the real estate industry due to its sizable young population and consistent demand. Along with the government’s steadfast commitment to engaging the private sector in this endeavour, the Vision 2030 aim of 70% home ownership has given the real estate sector new momentum and developers are creating a new blueprint for the nation. One such real estate developer is PIF-backed Saudi’s national real estate developer ROSHN. According to its group CEO David Grover, the developer “aims to lead the sector not only in the provision of housing and the efficient use of land but also in the development of non-housing assets”. A sharp demand increase in the real estate sector has created the greatest potential for the construction industry within the kingdom. For construction stakeholders — contractors, consultants, and suppliers alike — it is a brilliant time to be in Saudi Arabia. The world is witnessing a nation being built, and at Construction Week Saudi, we are chronicling this journey step by step. Signing off! PO Box 500024, Dubai, United Arab Emirates TEL +971 4 444 3000 WEB: WWW.ITP.COM Offices in Abu Dhabi, Dubai, London, Riyadh & Mumbai ITP MEDIA GROUP CEO Ali Akawi CFO Toby Jay Spencer-Davies Managing Director Alex Reeve Deputy Managing Director Nicky Dawson EDITORIAL Group Editor Carla Sertin carla.sertin@itp.com Editor in Chief Ranju Warrier +971 4 444 3385; ranju.warrier@itp.com Reporter Julianne Tolentino julianne.tolentino@itp.com Commercial Reporter Angitha Pradeep angitha.pradeep@itp.com ART Art Director Amjad Ayche amjad.ayche@itp.com Designer Tofiq Memon tofiq.memon@itp.com ADVERTISING Commercial Director Anup Nagpurkar +971 4 444 3573; anup.nagpurkar@itp.com Senior Sales Manager Moutaz Gadelhak +971 4 444 3177; moutaz.gadelhak@itp.com Commercial Manager Robert Cole +971 4 444 3417; robert.cole@itp.com PHOTOGRAPHY Videographers: Muhammad Kaleem, Julius Garcia Photographer: Marwan Elsayed Video Editor: Liju Cheruvathur Sound Engineer: Borys Hridin ITP LIVE General Manager Ahmad Bashour PRODUCTION & DISTRIBUTION Production Manager Denny Kollannoor Production Coordinator Mahendra Pawar Senior Image Editor Emmalyn Robles CIRCULATION Distribution Coordinator Avinash Pereira Circulation Executive Rajesh Pillai MARKETING Director of Awards & Marketing Daniel Fewtrell Website www.constructionweekonline.com Subscribe online at www.itp.com/subscriptions NOTICE: The publishers regret that they cannot accept liability for errors or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication, which is provided for general use and may not be appropriate for the readers’ particular circumstances. The ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be reproduced, stored in a retrieval system, or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review. PUBLISHED BY AND © 2023 ITP MEDIA GROUP FZ-LLC. “A sharp increase in real estate demand created the greatest potential for construction.”| 5 THINGS | 6 | 5 THINGS | 666666666666 With the construction industry working at full throttle in the kingdom, the infrastructure, real estate, and tourism sectors are bustling with activity. Construction Week Saudi runs down ve major things you should know about Saudi Arabia’s construction industry, from million-dollar contract awards and deals to megaproject launches and more. The world’s first indoor adventure centre will open in Riyadh The Discovery Adventures centre will span an area of around 3,000m2 and will be located at SEVEN’s entertainment destination in the Al Hamra district. Saudi Arabia to develop a $705 million heritage island for 120,000 inhabitants The kingdom will develop the 32km2 Darin, Tarout Island. The plan includes preserving the culture and historical heritage of the island, on top of reviving its natural and environmental sites.| 5 THINGS | 7 || 5 THINGS || 777777 https://magnet.itp.com/magnet/app/navigator/view_file.php?sf_id=12741581&sl_id=2&coming_fr om=navigate&r=1671457957&fetch_type=image&a_id=1&img_id=12741581&dynamic_creation=1&user_ id=1134691&server=np&a7x=1 https://magnet.itp.com/magnet/app/navigator/view_file.php?sf_id=12741581&sl_ id=2&coming_from=navigate&r=1671457957&fetch_type=image&a_id=1&img_id=12741581&dynamic_creation=1&u https://magnet.itp.com/magnet/app/navigator/view_file.php?sf_id=12741581&sl_id=2&coming_from=related_ files_light&r=1671457956&fetch_type=image&a_id=1&img_id=12741581&dynamic_creation=1&user_ id=1134691&server=np&a7x=1 ser_id=11 https://magnet.itp.com/magnet/app/navigator/view_file. php?sf_id=12741581&sl_id=2&coming_from=navigate&r=1671457957&fetch_type=image&a_id=1&img_ id=12741581&dynamic_creation=1&user_id=1134691&server=np&a7x=1 34691&server=np&a7x=1 https://magnet. itp.com/magnet/app/navigator/view_file.php?sf_id=12741581&sl_id=2&coming_from=navigate&r=1671457957&fet ch_type=image&a_id=1&img_id=12741581&dynamic_creation=1&user_id=1134691&server=np&a7x=1 The first 3D-printed villa will be constructed in the kingdom Real estate developer Dar Al Arkan launched the first 3D Construction Printed (3DCP) villa in the Shams Al Riyadh residential development. The 2-storey villa will be 9.9-metres high. Saudi’s construction industry remains the strongest across the MENA region Construction output growth in KSA is anticipated to rise by 3.2% in 2022, with a further annual average growth rate of 4% between 2023 and 2026. The King Salman International Airport will become one of the largest airports in the world Designed by Foster + Partners, the airport is expected to contribute $7.18 billion annually to the kingdom’s non-oil GDP and is expected to create 103,000 new jobs. ididididid=11=11=11113111 469 ididid=22=2=22&&&com hththththththththththththththththththtttptpttpttptptpttttttptptptptpps://ma fififfififfififififififiifififiileleleleleleleleleleleleleellel ss_ss_s_sss_sss_s_s_s_ss_s lilllllllll ght idididdddddidddidddididididd=1=1=1=1=11=11=1=11=111==1=11313131311131331313131313131331131 469 phphphphphphphphphphphhhphphphphphphphphp?p?p?p?p?p?p?pp?pp?p?p?ppp?p?pp?p sfssfsfsssfsfsssssssss _id ididdiddiididididdididididddidid=1=1=1=1=1=1=1=11=1=1=11=1=1=11=1272222222222222 415 iiitiiiiiii p com/mWith numerous high-profile projects in progress, Saudi Arabia’s construction industry is booming. The Saudi government is making substantial investments in the construction of its infrastructure. According to reports, Saudi Arabia has maintained its position as the strongest market in the MENA region for the past few years, holding a 35% market share. According to recent government statistics the construction sector —one of the biggest contributors to the Saudi GDP — rose by nearly 8.8% in the second half of 2022, accounting for nearly 4.18% of the Gulf Kingdom’s GDP and 10.1% of the non- oil GDP in the same period. Vision 2030: To remain the primary driver for construction growth In order to further promote Vision 2030, Saudi Arabia has started a journey to carry out a significant economic transformation, which has seen both private and public sector enterprises focused on reforms. The KSA megaproject programme, the largest civil infrastructure engineering initiative in the world covers construction of residential, industrial, and tourism projects in the kingdom. The value of Saudi Arabia’s Vision 2030 real estate and infrastructure projects reached $1.1 trillion earlier in 2022. Major hotel development has been sparked in particular by Vision 2030. Currently, Saudi Arabia is developing hotels worth more than $110 billion, all of which are expected to be finished by 2030 or sooner. It has more than 310,000 keys under development, which is more than five times as many as Dubai. In the kingdom, fourteen large- scale, ambitious projects are now in development with the goal of reshaping the economy. While each project’s development maturity level varies, it is obvious that a large infrastructure construction requirement will take precedence over the next few years. The sector will continue to place a high priority on residential, tourism, cultural, and green energy projects in 2023. Positioning the KSA construction industry for strong growth Across KSA, significant market activity will continue, and in 2023, the market is set to see a fresh wave of landmark projects. Construction growth output will be around 4% - 5% over the next 12 months. Construction expenses will continue to rise in 2023 as more volumes of work come online. Imported material price increases and project delivery challenges will continue throughout 2023. The KSA construction market is amidst a ‘perfect storm’ where multiple forces are all acting simultaneously in the market, fueling inflation and forcing prices up – all this in the context of soaring ambitions to transform the Kingdom’s Infrastructure and Real Estate Sectors. It had been widely acknowledged that 2022 would see tender prices increase by approximately 5%; however, more recent events are giving cause to re-evaluate this prediction. At present, no economist would be prepared to advise any definitive numbers due to the fluidity of the global situation however, at Turner & Townsend, we are now forming the view that double-digit Tender Price Inflation in KSA could well be experienced in the short-term with a potentially softening starting towards Q3/ Q4 2023. Beyond the broader global economic challenges, the KSA Construction sector is evolving, and certain measures have been identified to assist outline a route to success: • It is imperative for developers and stakeholders to use multiple data sources in order to determine project timelines. There is no doubt that data holds multi- level significance for KSA construction’s future. There are many issues it can solve, and it can significantly impact how we design, build and collaborate. • It pays to take time to clearly define the project brief and client’s requirements from the outset, particularly when working to challenging timescales. • Aligning and realigning project aspirations and budget from the outset will help to ensure expectations are fully understood. • Accurate digital models can be crucial during the design stage, with the potential to incorporate building information modelling (BIM) and artificial intelligence (AI). • The focus on driving local supply chain development growth needs to continue. • Implementation of up to date & comprehensive KSA benchmarking models will help boost productivity, cost control, and the execution of strategic project goals. Megaproject capital expenditures will continue in 2023. A number of important infrastructure projects will also finish their primary phases. Saudi Arabia will continue to lead the MENA region in terms of construction output growth in 2023. As the market continues to develop over the following 12 months, sustainability trends and reliance on technology will also increase in kingdom. Looking ahead the KSA construction sector has a large pipeline of projects, where numerous contracts are yet to be awarded, across a wide range of sectors including energy, power, water, and transport infrastructure, commercial, hospitality and residential real estate, and industrial developments. In 2023, competition in the KSA construction industry will only increase, with an influx of new domestic and foreign contractors, consultants and suppliers. Kobus Havemann is the director, KSA country manager at Turner & Townsend. 2023: AN UPWARD TREND FOR KSA CONSTRUCTION Project management plays a key role in Saudi Arabia’s construction industry, whether it is building a sustainable future or reaching the nation’s Vision 2030 goals Kobus Havemann, director, KSA country manager, Turner & Townsend. | OPINION | 8FUTURE OF BIM & DIGITAL TWINS STARTS HERE! Event theme is Enabling Digital Transformation and includes a 2-day conference plus workshop on latest developments for BIM, Digital Twins, GIS, and related technology. Presentations focus on the role of digital construction from project concept and design, project management, to full lifecycle asset management. This is the Kingdom’s leading event for BIM & Digital Twins! Presentations are by government and private sector organizations at the forefront of the Kingdom’s construction industry, and mega projects. Plus, international organizations that are leaders in smart sustainable construction and built asset management. Event website with further details is: www.bimdtksa.com NETWORK, MEET YOUR TARGET MARKET, AND DO BUSINESS! Adjacent to the strategic level conference is the expo area where event sponsors and exhibitors showcase the latest digital construction and asset management technology and services to delegates during the conference breaks. If this is your target market, then book now as the 2022 event booked out. For further details including event sponsorship and exhibitor opportunities call: Anthony Sprange Director of Conferences at ITP Media Group +971 (0)58 598 9062 or email: anthony.sprange@itp.com 14 & 15 FEBRUARY 2023, RIYADH ASSOCIATE SPONSORLUNCH SPONSORPOWERED BYMEDIA PARTNER BIM & DIGITAL TWINS SAUDI ARABIA 2023 CONFERENCE & EXPO OPEN BIM & DIGITAL TWINS: THE KEY TO INDUSTRY 4.0 EVENT PARTNER: STR ATEGIC PARTNER: Scan the QR code to learn more about the event and register KEYNOTE PRESENTATIONS INCLUDE: CASEY RUTLAND Vice Chair, UK BIM Alliance & Chair, buildingSMART UK & Ireland DAVID GLENNON Senior Digital Delivery Director, The Red Sea Development Company DR. ABDULLAH AL-HALAFI Digital Twin Consultant & VP, International Society of Automation WASSIM GHADBAN Vice President, Global Innovation & Digital Engineering, Kent MOSTAFA ELASHMAWY Senior BIM & GIS Manager Middle East, WSP BADR BURSHAID President, Project Management Institute KSA Chapter DR SALAH OMRAN Senior Projects BIM Manager, Turner International ABDELRAHMAN ABOUHADID BIM Manager, MaceNext >