Hammad Murtaza, Consultant at Avalon Consulting authored an article on Leveraging Megatrends in Saudi Arabia’s Construction Sector, which was published in Construction Week Saudi
He talked about the transformative phase of Saudi Arabia’s construction sector, driven by Vision 2030 and emerging global megatrends like sustainability, BIM, vertical urbanism, etc.
Additionally, he highlighted how Saudi Arabia can become a key market for players in the construction and related industries.
Leveraging Emerging Megatrends in Saudi Arabia’s Construction Sector: Sustainability, BIM and more
Saudi Arabia’s construction sector is undergoing a transformative phase, driven by Vision 2030 and global emerging megatrends. To thrive in this dynamic market, construction companies must understand and leverage these trends. This blog explores how sustainability, Building Information Modelling (BIM), and other key trends are reshaping the Saudi construction landscape, presenting opportunities for industry players.
The Green Building Revolution
Saudi Arabia is rapidly adopting sustainable construction practices, making green building a cornerstone of its development strategy. Even after the government promoting sustainability, as of 2023, only 24% of construction projects were able to adhere to green building standards, well below the global average of 47%. This gap represents a significant opportunity for companies specializing in sustainable construction.
Key Opportunities:
1. Energy-Efficient Design: With Saudi Arabia’s harsh climate, energy-efficient building designs are in high demand. Companies offering innovative cooling solutions and smart building technologies can gain a significant edge. The King Abdullah Financial District in Riyadh exemplifies this trend, featuring solar-powered sunshades that track the sun’s movement, achieving a 30% reduction in cooling energy consumption.
2. Sustainable Materials: The market for eco-friendly construction materials is growing rapidly. Firms that provide alternatives to traditional materials, particularly those reducing carbon footprints, can capitalize on this trend. SABIC’s new headquarters in Riyadh incorporates recycled plastic in its construction, setting a standard for large-scale sustainable building projects.
3. Water Conservation: In this water-scarce region, buildings with water-saving features are highly valued. Technologies for greywater recycling and efficient irrigation systems are particularly relevant. The Red Sea Project implements a centralized desalination plant powered by solar energy and advanced wastewater treatment for irrigation, demonstrating large-scale water conservation potential.
The Digital Construction Revolution
BIM adoption in Saudi Arabia is currently at 23%, presenting a significant opportunity for digital transformation. As the kingdom seeks more efficient construction methods, BIM will play a crucial role.
Key Opportunities:
1. BIM Implementation Services: Companies providing BIM implementation, training, and consulting can fill a critical market gap. Dar Al-Handasah has established a BIM Academy in Riyadh, training over 500 professionals annually, enhancing the region’s expertise in digital construction technologies.
2. Integrated Project Delivery: Firms that can demonstrate expertise in using BIM for integrated project delivery will have a competitive advantage in securing large-scale projects. The Riyadh Metro project used BIM to coordinate between multiple international contractors, reducing conflicts and saving an estimated $5 million in rework costs.
3. Digital Twin Technology: As Saudi Arabia develops smart cities like NEOM, the demand for digital twin technology in construction and urban planning is set to soar. NEOM is creating a comprehensive digital twin, enabling real-time monitoring and predictive maintenance of infrastructure.
Other Megatrends Shaping Saudi Construction
1. Vertical Urbanism and Urbanization: Rapid urbanization is driving a shift towards vertical urbanism, especially in cities like Riyadh and Jeddah. Companies that deliver innovative highrise solutions, such as advanced elevator systems and energy-efficient facades, will be in high demand. Moreover, the focus on vertical development is opening up opportunities for creating mixed-use developments that combine residential, commercial, and recreational spaces within a single structure, promoting more sustainable and efficient urban living.
2. Modular and Prefabricated Construction: With a pressing need for rapid development, especially in housing, modular and prefabricated construction methods are gaining traction.
3. Workforce Development and Saudization: A push for Saudization means companies that invest in training local talent will gain favor with government entities. Saudi Aramco’s Construction Academy has trained over 10,000 Saudi nationals in various construction trades, setting a benchmark for workforce development.
Leveraging Megatrends: Strategic Imperatives for Success
To capitalize on transformative trends, construction firms must adopt a strategic approach. Here are key imperatives for positioning themselves at the forefront:
- Sustainability Center of Excellence: Outsource or establish a dedicated team of sustainability experts who can lead the way in implementing green building practices. By enhancing competitiveness in projects aligned with Vision 2030, firms can not only meet regulatory requirements but also attract environmentally conscious clients.
- BIM and Digital Twin Investment: Developing expertise in Building Information Modeling (BIM) and digital twin technologies is essential for improving project efficiency. These tools enable real-time collaboration, better resource management, and enhanced decision-making, ultimately delivering more value to clients.
- Public-Private Partnerships: Collaborating with government entities is crucial for gaining early access to projects and influencing industry standards. By fostering these partnerships, firms can enhance their credibility, share resources, and benefit from government incentives aimed at promoting innovation.
- Agile Talent Development: Implementing comprehensive training programs to upskill local talent in emerging technologies and sustainable practices is vital for meeting Saudization quotas. This approach not only fulfils regulatory requirements but also contributes to long-term organizational resilience and adaptability in a competitive market.
By adopting these strategic imperatives, construction firms can adapt to Saudi Arabia’s evolving construction landscape and contribute significantly to the kingdom’s ambitious development goals while achieving sustainable growth and market leadership. Companies that embrace these megatrends will be best positioned to capture the immense opportunities presented by Saudi Arabia’s construction boom.
About Avalon Consulting:
Avalon Consulting is a premier global management consulting firm helping organizations navigate complex business transformations since 1989. Headquartered in Mumbai with offices across India, Singapore and the Middle East, Avalon partners with clients ranging from Fortune 500 companies to emerging businesses across sectors. In the construction sector, Avalon has established itself as a thought leader, working extensively with sustainable construction players to optimize operations, reduce environmental impact, and develop green building solutions. The firm brings deep expertise in digital transformation, growth strategy, operations excellence and organizational development, delivering actionable solutions that drive sustainable results.
About Author:
Hammad Murtaza is a management consultant with Avalon Consulting, bringing over 4 years of experience in strategy formulation and business development. Hammad has worked with client across geographies in performance improvement, cost optimisation, market entry strategy projects and commercial due diligence. Hammad holds an MBA in General Management from the Xavier Institute of Management, Bhubaneswar and a Bachelor’s degree in Mechanical Engineering from ZHCET, Aligarh Muslim University, reflecting a strong foundation in both technical and business disciplines.
Hammad Murtaza
Hammad Murtaza is a management consultant with Avalon Consulting, bringing over 4 years of experience in strategy formulation and business development. Hammad has worked with client across geographies in performance improvement, cost optimisation, market entry strategy projects and commercial due diligence. Hammad holds an MBA in General Management from the Xavier Institute of Management, Bhubaneswar, and a bachelor’s degree in mechanical engineering from ZHCET, Aligarh Muslim University, reflecting a strong foundation in both technical and business disciplines.
Email: hammad.murtaza@consultavalon.com
