Saudi construction shifts to smaller, phased projects as mega-awards fade

Saudi contracting awards fell off a cliff by value in August compared to July, while volume actually climbed. August awards totaled SAR 4.86 bn across 13 projects, down 50% by value from July’s SAR 9.75 bn, even as the project count rose from 11. Zoom out further and the picture gets more benign still: On a y-o-y basis — compared to August 2025’s six projects worth SAR 4.81 bn — last month’s value is essentially flat, while volume is up 117% y-o-y, according to a Saudi Contractors Authority report (pdf).

The real story here is deal size, not dealflow. More projects are coming to market than a year ago — they’re just smaller and more numerous, marking a sharp reversal from June (SAR 29.5 bn) and May (SAR 30.04 bn), when a handful of mega-awards drove the total. Compass Project Consulting VP of Operations Hamed Aljufairi tells EnterpriseAM this reflects a shift from launching multiple mega-programs simultaneously to a phased, disciplined rollout: “The main change is the phasing and timing of projects coming to market, rather than any fundamental weakening of the Saudi construction sector.”

The August pipeline skewed commercial and regional: All 13 awards fell under buildings and construction, led by four commercial projects worth more than SAR 1.5 bn, alongside residential, hospitality, and a 500 MW AI data center in the Eastern Province tied to Humain and Nvidia. Riyadh took seven projects worth SAR 3.39 bn (54% of the month’s value), while the Eastern Province took the other six, worth SAR 1.46 bn. Riyadh Holding led project owners by value, with five projects worth more than SAR 3 bn, ahead of Al Khafji Joint Operations, Refad Real Estate, and Ajdan Real Estate Development.

Much of what’s been awarded won’t break ground for years — one SAR 300 mn project is due for completion in 2028, while six projects worth more than SAR 1 bn are scheduled for 2029 and another six, worth around SAR 3 bn, for 2030. “The next phase, therefore, is less about announcing bigger projects and more about delivering committed projects, controlling costs and bringing developments to market on a commercially sustainable basis,” Aljufairi adds.

The authority expects eight new awards this month, more than half in buildings and construction and roughly half split between Riyadh and the Eastern Province. Potential project owners include PIF, Aramco, the Royal Commission for Riyadh City, Qiddiya and Saudi Arabia’s railway operator.