Project Management & Cost Consultancy Services

Middle East and North Africa

KSA Construction Costs

UPDATE – September 2020
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Construction Cost Movement

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A reverse in construction cost inflation should be welcomed news for Real
Estate Developers across Saudi Arabia

KSA Construction Costs – Sept 2020

Colliers International | Middle East and North Africa
The Market Outlook
A future balancing of the budget is likely to moderate planned spending across the construction industry until COVID-
19 is under control and oil prices regain an upward trend towards a sustainable level. The KSA construction market in
2020 will be negatively impacted. The number of previously forecasted projects to be awarded will drop, particularly
in the private sector. This hold on or suspension of projects will continue as the pandemic extends through the
4th quarter of 2020.

Materials
Between the period from Q2 2019 to Q2 2020, there has been a slight increase in pricing for some key construction
materials. Precautionary measures relating to COVID-19, affecting productivity and logistics, has impacted global
material supply chains putting an upward pressure on costs. Below shows the percentage movement through this
period, for a select sample of materials.

Timber Block Work Marble Tile Aluminum

3% 6% -5% 1%

Sand Concrete Rebar Cement

-2% +4% -2% -0.5%

Inflation Outlook
Looking forward from now to the end of 2020, the overall cost of construction for new tenders should not increase and
when compared to the 4th quarter of 2019, we predict that construction costs will reduce by more than 3%, due to a
diminished pipeline of work and increased competition.
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Colliers International | Middle East and North Africa
KSA Construction Costs – Sept 2020

Saudi Arabia
Construction Cost Benchmarking 2020 (4th Qtr)
Cost Range
Item Building Type
(SAR/m2)
Residential
1 Villa - Commercial Specification 1,922 - 2,405
2 Villa - Medium Specification 2,592 - 3,792
3 Villa - Medium High Specification 3,762 - 4,650
4 Apartment Low to Medium Rise - Commercial Specification 2,375 - 2,975
5 Apartment Low to Medium Rise - Medium Specification 3,025 - 3,971
6 Apartment High Rise - High Specification 4,851 - 5,978
Commercial (Shell and Core Only)
7 Office Low Rise – Commercial to Medium Specification 2,575 - 3,215
8 Office Medium Rise - Medium Specification 3,320 - 4,108
Industrial
9 Data Centre – Tier 3 (SAR/KW) 56,625 - 70,875
10 Light Duty Industry 1,705 - 2,730
11 Medium Duty Industrial 2,510 - 4,851
Hotels (Including FF&E)
12 Three Star 4,905 - 6,623
13 Four Star 6,490 - 8,320
14 Five Star 8,310 - 9,960
Retail (Shell and core with public area finished)
15 District Mall 3,795 - 5,362
Car parking
16 Podium 1,825 - 2,411
17 Basement 2,215 - 2,902

• Professional fees, land acquisition costs and financing costs are excluded from the above.
• All hotel rates are inclusive of Furniture, Fittings and Equipment (FF&E).
• Costs/m2 are based on GIA as per the RICS code of measuring practice 6 th edition.
• Cost ranges capture the average, based on all regions throughout Saudi Arabia.
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Colliers International Construction
Consultancy
As specialist construction consultants we provide
project, cost and construction management services.

KSA Construction Costs – Sept 2020

Colliers International | Middle East and North Africa
Our success is based on two simple principles;
i. Construction advisory that is tailored to each
client, based on the knowledge of our staff whom
first and foremost are construction people.
ii. Our services ensure risks are eliminated, quality
of design & construction is delivered, optimum
program timelines are achieved, all at the lowest
price possible.

Our Project Management & Cost

Consultancy Services include:
Project Management
> Development Management
> Program Management
> Project Management
> Client Representation
> Construction Supervision
> Tenant Coordination
> Building Surveying

Quantity Surveying
> Cost Modelling & Benchmarking
> Cost Planning/Management/Control
> Risk Appraisal
> Life Cycle Costing
> Value Engineering
> Procurement Strategy & Advise
> Tendering & Evaluation
> Tender Documentation & Bills of Quantities
> Contract Documentation & Administration
> Cash Flow Forecasting

Project Monitoring
> Bank/Financial Institution Representation
> Early Warning Advice
> Project Cost Analysis and Advice
> Program Monitoring
> Stage Payment Recommendations
> Quality & Specification Inspections
 FOR MORE INFORMATION

Bob Flanagan Imad Damrah

Managing Director Managing Director
Project Management & Cost Consultancy Services Kingdom of Saudi Arabia
Middle East & North Africa Imad.Damrah@colliers.com
bob.flanagan@colliers.com

Justin Ng
Director
Cost Consultancy Services
Middle East & North Africa
justin.ng@colliers.com

About Colliers International

Colliers International is a global leader in commercial real estate services, with over 18,000 professionals operating in 68 countries. Colliers International delivers a full range of
services to real estate users, owners and investors worldwide, including global corporate solutions, brokerage, property and asset management, hotel investment sales and
consulting, valuation, consulting and appraisal services and insightful research. The latest annual survey by the Lipsey Company ranked Colliers International as the second-
most recognised commercial real estate firm in the world. In MENA, Colliers International has provided leading advisory services through its regional offices since 1996.

Disclaimer

The information contained in this report has been obtained from sources deemed reliable. Any information on projects, financial or otherwise, are intended only to illustrate particular points of argument and do
not constitute forecast of actual performance. While every reasonable effort has been made to ensure the accuracy of the information, we provide no warranty or guarantee as to the accuracy or completeness
of the information in this report and Colliers International assumes no liability whatsoever in relation to the forecast, figures or conclusions contained herein. Any statements or opinions must not be treated as
investment or valuation advice and must not be relied on for investment or any other purposes. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in
this report.