Saudi Arabia Construction Equipment Lease/ Rental Market By Type (Loader, Forklift, Excavator, Dozers, Others), By Application (Material Handling, Earthmoving, Concrete and Road construction, Others), By Power Output (<100hp, 101-200hp, 201-400hp, >400hp), By End User (Oil & Gas, Construction, Infrastructure, Manufacturing, Others), By Region, Competition, Forecast & Opportunities, 2019-2029F

Market Overview

The Saudi Arabia construction equipment lease/ rental market has shown robust growth, reaching a value of USD 1,990.97 million in 2023, and it is forecasted to expand to USD 3,395.11 million by 2029 with a compound annual growth rate (CAGR) of 9.56% during forecast period. This growth is largely fueled by Saudi Arabia's ambitious infrastructure and urbanization initiatives under the Vision 2030 framework, which seeks to reduce the nation’s reliance on oil by diversifying its economy. As a result, the demand for construction equipment has surged, particularly in the leasing and rental segment. Saudi Arabia’s commitment to transforming the nation is evident, having already achieved the top position in the global RICS Construction Activity Index, highlighting the continuous expansion and potential of its construction industry. The emphasis on mega projects like NEOM and the Red Sea Project has amplified the demand for advanced construction machinery, offering substantial growth opportunities within the leasing and rental sector as companies aim to control operational cost and capital expenditures.

Key growth drivers include the extensive infrastructure projects that require an assortment of construction equipment for execution. Leasing and renting enable companies to access a wide range of machinery without the significant financial commitment of outright purchases, particularly beneficial as technology advances and equipment demands vary across projects. The construction sector in Saudi Arabia is witnessing a shift toward urban development and smart city projects, which necessitates specialized machinery and technology. Leasing offers flexibility, allowing construction companies to access the latest equipment that meets stringent project requirements while supporting cost-effective operations. For instance, projects like the Riyadh Metro and Jeddah Economic City demand state-of-the-art machinery, driving a preference for rental services. This approach helps companies manage cost and risk while benefiting from high-quality equipment that can be easily updated as new technologies emerge.

While the market presents promising opportunities, certain challenges remain, particularly in terms of regulations, logistical requirements, and fluctuating equipment cost. Leasing companies must continuously invest in fleet upgrades to keep pace with technological advancements, which can be costly. There is also a rising demand for sustainable construction equipment, as the industry moves towards eco-friendly practices, necessitating electric or hybrid machinery to meet environmental goals. Companies in the lease and rental sector face the challenge of balancing these investments with competitive pricing. Moreover, the construction industry’s reliance on high-quality equipment and specialized machinery requires efficient supply chains and skilled personnel, which could strain resources, particularly for smaller firms. As the market continues to grow, players in the leasing and rental sector are expected to navigate these challenges, capitalizing on opportunities to support Saudi Arabia’s transformative vision and the evolving demands of the construction industry.

Market Drivers

Booming Construction Sector

Saudi Arabia’s Vision 2030 initiative, aimed at diversifying the economy and reducing dependence on oil, has led to an unprecedented rise in infrastructure and construction projects. In February 2024, NEOM announced the world's largest earthworks and piling operation at the site of The Line. Other megaprojects include the Red Sea Project, Diriyah, Qiddiya, and ROSHN. Riyadh also has several projects in various stages of construction. These megaprojects are driving demand for construction equipment across various segments, including earthmoving machinery, material handling equipment, and heavy machinery. Large-scale projects are key factors boosting the demand for rental equipment in the Kingdom, as companies prefer renting to avoid high upfront cost and maintenance responsibilities. Saudi Arabia's Vision 2030 is driving an impressive USD 1.3 trillion in investments across the kingdom's real estate, infrastructure, and other sectors. Furthermore, Aramco and TotalEnergies have granted contracts for engineering, procurement, and construction related to the Amiral complex, which is valued at USD 11.0 billion. This complex represents a significant expansion of the SATORP refinery located in Jubail, Saudi Arabia. This petrochemical facility is anticipated to support SATORP in furthering Aramco’s strategy of converting liquids to chemicals, with commercial operations expected to commence in 2027.

Growing Strategic Partnerships & Technological Advancements

Saudi Arabia's construction equipment lease/ rental market is thriving due to significant investments and strategic alliances. Technological advancements have increased demand for modern machinery, leading to a surge in strategic partnerships and joint ventures. These partnerships aim to leverage advanced technologies, expand equipment fleets, and strengthen service networks. For instance, in 2024, the Front End Limited Company, a Saudi-based enterprise, announced an exclusive partnership agreement with Crane+. Similarly, Al Marwan Machinery signed an exclusive agreement to supply KOBELCO crawler cranes in the Saudi market, capitalizing on the demand for high-quality heavy machinery, particularly lifting equipment, in Saudi Arabia's construction and infrastructure sectors.

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Key Market Challenges

High Competition and Demand Pressure

In Saudi Arabia’s construction equipment lease/ rental market, high competition among local players and demand pressure present significant challenges. The construction sector, driven by ambitious projects under Vision 2030 (such as NEOM and The Red Sea Project), experiences fluctuating demand. Peaks occur during certain phases of these projects, creating pressure on equipment availability and logistics. This intermittent demand requires companies to manage their fleets flexibly, often resulting in equipment shortages or surpluses that can disrupt profitability. Consequently, many companies, especially smaller or local rental service providers, face difficulties in maintaining profitability.

To remain competitive, they often resort to offering discounts, bundling services, or providing extended rental periods, all of which impact their profit margins. Additionally, the pressure to maintain and upgrade equipment to meet client demands for modern, reliable machinery further adds to the operational cost of these companies. Smaller players, with limited resources, often struggle to invest in larger, modern fleets or to match the pricing strategies of global competitors, leading to increasing market consolidation.

Maintenance and High Operating Cost

One of the critical challenges in the Saudi Arabia construction equipment lease/ rental market is the high cost of maintaining and operating rental fleets. Harsh climatic conditions, including extreme heat, dust, and sandstorms, significantly increase the wear and tear on equipment, leading to frequent breakdowns and higher maintenance cost. Companies are forced to invest in frequent repairs and replacement parts, which raises operational expenses and decreases profitability.

In Saudi Arabia, delays in construction projects contribute to increased downtime for construction equipment. Large infrastructure projects, such as Neom and the Red Sea Project, are often subject to delays due to various factors, including regulatory approvals, funding issues, labor shortages, and changes in project scope. These delays directly affect the utilization rate of rented construction equipment, as machinery scheduled for deployment on a specific project often remains idle until the project resumes. Equipment that sits unused during project delays incurs cost.

Key Market Trends

Rising Preference for Chinese Equipment

Saudi Arabia’s construction equipment lease/ rental market has witnessed a growing preference for China-made equipment, driven by several factors, including cost-effectiveness, technological advancements, and the availability of modern features in Chinese machinery. Brands such as SANY, XCMG, Zoomlion, and LiuGong offer construction machinery at prices that are often lower than those of their Western counterparts. This enables rental companies to expand their fleets with lower capital investment, giving them a competitive edge in the price-sensitive market. As project cost continue to rise, contractors and rental firms seek cost-efficient solutions to maintain profitability. Chinese equipment manufacturers have strengthened their after-sales service networks in Saudi Arabia, including service centers, dealer partnerships, and the ready availability of spare parts, to increase the confidence of rental companies.

Focus on Diversified Rental Solutions

A key trend in the construction equipment lease/ rental market in Saudi Arabia is the growing emphasis on diversified rental solutions. For instance, Kanoo Rental, the rental arm of Kanoo Machinery, is expanding its services beyond traditional equipment leasing to offer more flexible and tailored options. These include dry lease contracts (both short- and long-term), lease-to-own programs, and buy-back and trade-in options for customers looking to upgrade or exchange equipment. Furthermore, the sale of used and refurbished equipment, along with the refurbishment of existing machines, is becoming increasingly popular, allowing businesses to access high-quality, cost-effective equipment while maintaining operational flexibility. This trend is driven by the demand for scalable solutions across various sectors, helping companies manage capital expenditure while addressing project-specific needs. For instance, in 2022, Expertise Contracting Co. ordered 79 Tadano Cranes, including 50 AC 3.055-1, 17 AC 5.130-1, 11 AC 5.250-1, and 1 AC 8.500-1 models to expand its crane portfolio. The company serves over 1,500 clients in sectors like petrochemicals, oil and gas, and energy across the Middle East.

Segmental Insights

Application Insights

In 2023, the Material Handling segment dominated Saudi Arabia’s construction equipment leasing and rental market. The rising demand for efficient transportation and management of materials in industries such as logistics, warehousing, and retail has led to a significant increase in the need for material handling equipment. This equipment plays a critical role in the movement, storage, and control of materials across various stages of the supply chain. Warehousing and distribution centers, in particular, have driven the demand for equipment like forklifts, pallet jacks, and conveyor systems. As Saudi Arabia’s retail and e-commerce sectors continue to expand, material handling equipment has become essential for optimizing inventory management and ensuring smooth logistics operations.

The construction sector has also contributed to the growing importance of material handling equipment. Construction sites require the efficient movement of construction materials, tools, and equipment, often in tight or confined spaces. Material handling machinery helps streamline operations and improve safety on-site, which is critical given the complexity and scale of modern construction projects. With Saudi Arabia's ongoing infrastructure projects and urban development, demand for these solutions has risen significantly. The flexibility provided by leasing equipment, rather than purchasing, allows construction companies to scale their fleet according to project needs without being burdened by maintenance costs or long-term commitments.

Furthermore, material handling equipment’s role in the broader industrial growth of Saudi Arabia has fueled its dominance in 2023. Industries such as oil and gas, manufacturing, and logistics require reliable and versatile equipment for handling raw materials, finished goods, and machinery. Leasing material handling equipment allows businesses to optimize operations without the large upfront capital expenditure typically associated with purchasing such machinery. As demand for material handling solutions grows across various industries, the segment is expected to maintain its leading position in Saudi Arabia’s construction equipment leasing and rental market in the years ahead..

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Region Insights

The northern and central regions of Saudi Arabia play a crucial role in the construction equipment lease and rental market, hosting a significant concentration of major infrastructure projects. This regional dominance stems from high-profile projects such as the Riyadh Metro, the King Abdullah Financial District, and the NEOM mega-city development, which collectively fuel demand for diverse construction machinery on a large scale. These projects require substantial equipment resources, including loaders, excavators, cranes, and dozers, creating robust leasing and rental opportunities for suppliers catering to these high-demand regions.

In central Saudi Arabia, Riyadh’s metropolitan area exemplifies the country’s commitment to urban development. The Riyadh Metro project, one of the most extensive public transport networks being built in the region, necessitates substantial construction equipment for both above-ground and underground development, driving equipment demand for lease and rental options. Similarly, the King Abdullah Financial District is set to establish Riyadh as a financial hub, and its complex construction demands specialized machinery for various stages of high-rise and infrastructure construction. These projects not only reflect Riyadh’s strategic economic role but also its impact on the construction equipment market.

Further north, NEOM represents one of the Kingdom's most ambitious initiatives under Vision 2030, designed to be a futuristic mega-city with sustainable, smart infrastructure. NEOM’s scale and vision necessitate advanced construction equipment for rapid, environmentally conscious development. The demand for equipment leasing in NEOM and nearby areas highlights the importance of flexible, scalable solutions that leasing provides, supporting the project's evolving requirements without high capital investments from individual firms.

Recent Developments

• Zahid Tractors, the authorized CATERPILLAR dealer and equipment rental firm in Saudi Arabia, has significantly benefited from the NEOM giga project. The company has reported the provision of 5,000 units, including tractors, excavators, loaders, graders, and trucks, which are presently deployed on-site. Furthermore, Zahid Tractors anticipates that this figure will increase to 10,000 units in the forthcoming years.
• In December 2023, Arabian Machinery & Heavy Equipment Co. (AMHEC), a prominent crane and heavy haulage firm, placed an order for 55 new cranes from Liebherr. This order marks the largest ever received by Saudi Liebherr Co. The acquisition includes a diverse range of mobile cranes with lifting capacities ranging from 100 to 800 tonnes. As part of this significant order, AMHEC will obtain the following models: LTM 1100-5.3, LTM 1110-5.2, LTM 1160-5.2, LTM 1230-5.1, LTM 1250-5.1, LTM 1300-6.3, LTM 1450-8.1, LTM 1650-8.1, and LTM 1750-9.1.
• In November 2024, Dayim Holdings, a rental and logistics company based in Saudi Arabia, secured a substantial investment from the private equity firm LetterOne. This firm oversees a portfolio of USD 20 billion, focusing on various sectors including energy, telecommunications, retail, and healthcare. Dayim Equipment operates rental facilities across Saudi Arabia, Qatar, Kuwait, Bahrain, and the United Arab Emirates, offering an extensive selection of construction equipment and tools for rent.

Key Market Players

• Expertise Contracting Co Ltd
• Mohammed Abdullah Al Areedh Company
• Arab International Transport and Heavy Equipment Company Ltd
• Fahad S. Al-Tamimi Group
• Zahid Tractors and Heavy Equipment Company Ltd
• Al Jaber Heavy Lift & Transport Co. Ltd
• Bin Quraya Company Limited
• Source Machinery for Trading & Contracting Company Ltd
• SAQCO Arabia Limited Company
• National Basics Company Limited

Report Scope:

In this report, the Saudi Arabia Construction Equipment Lease/ Rental Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

·         Saudi Arabia Construction Equipment Lease/ Rental Market, By Type:

o   Loader

o   Forklift

o   Excavator

o   Dozers

o   Others

·         Saudi Arabia Construction Equipment Lease/ Rental Market, By Application:

o   Material Handling

o   Earthmoving

o   Concrete and Road Construction

o   Others

·         Saudi Arabia Construction Equipment Lease/ Rental Market, By Power Output:

o   <100hp

o   101-200hp

o   201-400hp

o   >400hp

·         Saudi Arabia Construction Equipment Lease/ Rental Market, By End User:

o   Oil & Gas

o   Construction

o   Infrastructure

o   Manufacturing

o   Others

·         Saudi Arabia Construction Equipment Lease/ Rental Market, By Region:

o   Northern & Central

o   Western

o   Eastern

o   Southern

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Saudi Arabia Construction Equipment Lease/ Rental Market.

Available Customizations:

Saudi Arabia Construction Equipment Lease/ Rental Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).