Saudi private sector education demand to double by 2030: Colliers

Demand for private sector education in Saudi Arabia is expected to double by 2030, according to a latest report from Colliers International.

Presently the market share of the private sector stands at 18.2 percent, compared to 40.9 percent in Kuwait, 73.4 percent in the UAE, and 90.5 percent in Dubai.

The increase will require an additional 800,000 new seats in the Saudi sector by 2030.

“The share of international schools is even lower, with just 378,000 students, out of 6.1 million students. With the exception GEMS Education and SABIS, no regional or international operators are currently operating in Saudi Arabia,” Mansoor Ahmed, director at Colliers MENA, said.

Saudi Arabia has the largest single Kindergarten to K12 education market in the Arabian Gulf. The report noted that schools in the Kingdom currently account for over 85 percent of nearly 39,000 schools, with students making up 68 percent of the total 9.1 million in the region.

In the 2019 budget, the Saudi government allocated $51 billion for education - the highest allocation for any sector - representing 21 percent of fiscal spending and 7 percent of total GDP.

In Q1 2019, there was an 800 percent increase in the number of new education-related companies that received a business license from Saudi Arabian General Investment Authority (SAGIA).

“These companies include some of the sector’s most well-known education providers from the United States, the United Kingdom and from across the Gulf region with a total SAR 3.9 billion in confirmed commitments,” Ahmed said.

The report also highlights a potential for growth with a focus on Saudi nationals. It revealed that, currently, only 13 percent of the Saudi student population attend private schools, compared to Oman (14 percent), Kuwait (21 percent), Dubai (37 percent), and Abu Dhabi (57 percent).

“Similar to other GCC countries, Saudi Arabia has a very young population profile, continuously fueling demand for K12 education. As of the end of 2018, out of a 33.4 million population, 7.3 million (21.8 percent) are in the school going age group of 3 years (KG1) to year 17 (Grade 12), which is expected to increase to 9.5 million (21 percent) by 2030 with total population size of 44.9 million,” Ahmed added.

With a per capita income of $20,000 per annum, affordability is also expected to play a major role in the growth of K12 private education sector in the Kingdom.

“There will always be demand for premium schools with even higher fees levels, however, based on Colliers Education’s local knowledge, the sweet spot for international private schools would range from between $9,500 to $16,000 per annum,” he concluded.