Saudi Arabia Prefab Wood Buildings Market

Saudi Arabia Prefab Wood Buildings Market Analysis

The Saudi Arabia Prefab Wood Buildings Market is expected to register a CAGR of greater than 4% during the forecast period.

• COVID-19 has impacted the wooden prefabricated structures market in Saudi Arabia. Due to COVID-19 restrictions, many construction projects were delayed or canceled. In addition, the pandemic has boosted offsite construction in the country, which offered improved safety, reduced risk, and greater certainty of completion on time and within budget.
• Moreover, Saudi Arabia emerged as a leading market for Nordic wood in the Middle East and Africa Region. In addition, most of the wooden building manufacturers in the country focus on Nordic timber. Also, the Saudi population will require a lot more wood to build its future. Thus, the country is highly dependent on timber imports. Meanwhile, to meet the growing demand for prefabricated structures, the country imported more than 25,200 tonnes of prefabricated buildings (whether or not complete or already assembled). Also, United Arab Emirates, Netherlands, China, Jordan, and Lebanon are the top five exporters of prefabricated buildings to Saudi Arabia.
• Furthermore, under Vision 2030, Saudi Arabia is redefining its tourism and hospitality sectors. In 2022, recently launched ecolodge brand ENVI Lodges and Al Rasim Hotels and Resorts are planned to develop a waterfront project on the Kingdom of Saudi Arabia's Red Sea coast. In addition, Al Rasim Hotels and Resorts planned to initiate an experiential lodging on the shores of the Red Sea, which comprises of nearly 40 modular pods, prefabricated, and transported to the site. These modular pods will be installed on individual decks, which will lower the environmental impact and minimize disturbance at the site. Thus, the growing concern about sustainability, increasing focus towards affordable housing, etc. factors are driving the wooden modular buildings adoption in the country.

Saudi Arabia Prefab Wood Buildings Market Trends

The Growing Hospitality Sector is Driving the Market

Saudi Arabia's interest in wooden modular construction is gaining traction recently. In addition, the country witnessed growth in the adoption of modular buildings, for instance, Amana group was awarded a contract to construct a 150-room hotel for The Red Sea Development Company (TRSDC) with prefabricated structures. In addition, wooden prefab building construction has a long list of benefits, and it can be completed in 30% less time than more traditional construction methods.

Moreover, modular structures are witnessing significant demand because, they can be completely constructed on manufactured plants, and work delays due to weather conditions were almost negligible. In addition, site preparation can take place while the modular building is being constructed and, because they are typically completed in shorter timeframes, costs less when compared to conventional structures.

Meanwhile, the sustainability factors involved in the hospitality construction sector also promote wooden prefab building installation. As adoption of new methods, such as off-site modular construction, is helping the hospitality sector to reduce its carbon footprint significantly. Moreover, hotel construction projects are on the rise in the country. In 2022, Riyadh had the highest share of hotel construction projects in Saudi Arabia. Thus, the growing hospitality sector is expected to drive the demand for wooden modular buildings manufacturing.

Increasing Demand for Housing Units Fuelling the Market Growth

In 2022, as per industry experts, Saudi Arabia's housing demand is expected to witness a growth rate of more than 50%, reaching 153,000 houses by 2030 from 99,600 dwellings in 2021. In addition, the kingdom planned to create nearly 1.2 million new homes to reach a housing stock of 4.96 million houses by 2030. The increasing demand will drive the wooden prefabricated homes adoption in the country.

Moreover, under Vision 2030, the kingdom made remarkable progress in transforming its housing sector in the past decade. Also, the country planned to achieve more than 70% of home ownership under this vision. In addition, government initiatives and financing policies are bolstering the housing market growth. However, the Saudi Central Bank played a vital role in the housing sector's growth, by reducing the minimum down payment from 30% to 5% of the purchase price and offering numerous home loans.

Meanwhile, along with improving financing in the sector, the kingdom has encouraged the involvement of the private sector, particularly to develop affordable housing in the country. This initiative will boost the prefabricated wooden structures installations in the country. Moreover, in Q2 2021, the residential market's housing stock in Riyadh amounted to more than 1.3 million units, followed by Jeddah with 856,000 housing units.

Saudi Arabia Prefab Wood Buildings Industry Overview

The report covers major players operating in the Saudi Arabia Prefab Wood Buildings Market. The market is highly competitive and fragmented in nature, with none of the players occupying the major share. To remain competitive in the market the major players in the market are constantly working to enhance their product offerings to meet the changing needs of the wooden prefab homes market. Some of the major players in the market include DTH Prefab, Al Rashed, Red Sea International, Newfab, etc.

Saudi Arabia Prefab Wood Buildings Market Leaders

Saudi Arabia Prefab Wood Buildings Market News

January 2022: Red Sea International Company (a Tadawul-listed modular specialist), signed a seven-year extension contract with Schlumberger (a global oilfield services company), and the project worth is around USD 19.4 million. Under this contract, the company provides fully furnished modular units that are used as admin offices and accommodations. They are built of high-quality components to sustain the harsh weather conditions and continuous mobilizations to the different drilling locations.

January 2022: Red Sea International Company (a Tadawul-listed modular specialist) signed a contract with the Red Sea Development Company (one of the Middle East's most successful leisure and hospitality companies). The contract is to design, manufacture, supply, and install three complexes in the Western region, to support the construction activities of luxury hotels on three islands in the Red Sea (Sheybarah/Ummahat Al Shaikh islands).