JLL Raises Saudi Construction Tender Inflation Forecast to 5%
JLL has raised its forecast for construction tender price inflation in Saudi Arabia to 5% in 2026 from 4%, expecting the rate to stabilize at the same level next year.
JLL has raised its forecast for construction tender inflation in Saudi Arabia to 5% during 2026, compared to a previous estimate of 4%, and expects the rate to stabilize at the same level next year, according to Asharq Bloomberg citing Maroun Deeb, Head of Project & Development Services for the Middle East and Africa at the company.
Deeb stated that war pressures and rising construction costs do not reflect the long-term trajectory of the Saudi real estate market, describing the current period as time-limited and unsuitable as a benchmark for judging the market. He explained that prices of copper, aluminum, and diesel, along with shipping and insurance costs, are raising the cost of imported materials and affecting project delivery schedules.
He added that competition among contractors helped absorb some of these pressures, in addition to encouraging local production which contributed to price controls, ruling out contractor exits from the market despite higher tender prices. He stressed the importance of early planning for raw material procurement, supplier diversification, and setting contingency plans for supply chains.
Deeb identified data centers, logistics warehouses, and the residential and hospitality sectors among the top opportunities, supported by Expo 2030 and the 2034 World Cup, as well as regulatory changes related to foreign ownership. He noted that hotel supply remains below demand levels, and that foreign investor interest in the residential sector leads their inquiries about the market.
What do these terms mean?
Construction tender inflation: The rise in prices of bids submitted to execute construction projects, measured annually by real estate experts as a percentage.
Supply chain: The sequence of steps materials pass through from supplier to project site, including purchasing, shipping, storage, and delivery.
Data centers: Buildings equipped to host servers and computing technologies, requiring specialized power, cooling, and infrastructure.
Weekly Newsletter
Read between the lines before everyone else. Decode the most important economic, tech, and decision-maker movements in the region.. in 5 minutes every Saturday.
