Riyadh Only Arab City to Rank on Savills Latest Growth Hubs Index

Saudi Arabia’s capital Riyadh is projected to be among the top 15 fastest-growing cities by 2033, fueled by a population increase of over 25 percent, sustained government infrastructure spending, and attractive fiscal policies.

By Melissa Cyrill

Savills’ report findings

Savills’ global research program, “Impacts”, has examined the economic strength pillar of its Resilient Cities Index and projected it through 2033 to identify high-growth cities with increasing wealth and expanding economies. Indian and Chinese cities each claimed five of the top 15 spots, followed by Vietnam with two, and the Philippines, Bangladesh, and Saudi Arabia with one each.

Saudi Arabia offers abundant opportunities for new development and business expansion, driven by Saudi Vision 2030. Its capital Riyadh is poised for significant growth with a projected 26 percent population increase, rising from 5.9 million to 9.2 million over the next decade. This growth is expected to drive continued government spending on mega infrastructure projects and improved amenities and services to accommodate the burgeoning population.

An impressive 67 percent of Saudi Arabia’s 36-million-strong population are under the age of 35 and the employment potential and spending power of this demographic over the next decade cannot be ignored.

Recent Saudi government data show that a 5.6 percent increase was recorded in foreign direct investment (FDI) into the country, reaching SAR 9.5 billion (US$2.53 billion) in the first quarter of 2024 compared to the previous year.

The 30-year tax relief for regional headquarters, expanding market, and promising prospects are drawing international companies to Riyadh, solidifying its role as a crucial regional hub for leading businesses across various industries, according to Savills head in Saudi Arabia, Ramzi Darwish.

In 2023, Riyadh saw a significant increase in corporate interest, with over 180 foreign companies establishing their regional headquarters in the city, surpassing the initial target of 160. This growing confidence underscores the strong potential of the Saudi capital.

As global growth increasingly shifts from west to east, the real estate implications for cities are expanding. Emerging innovation hubs will attract businesses looking to grow and scale, driving demand for office spaces, manufacturing and logistics facilities, and housing. Additionally, rising personal wealth and disposable incomes will create opportunities for new retail and leisure developments.

Asia’s economic transformation, with its strong focus on tech-driven growth, underpins the dominance of its cities in Savills’ rankings. Planned infrastructure investments and strategies to enhance connectivity and business competitiveness are also key factors.

While economic performance and population growth are promising indicators of future potential, other factors are essential for sustained success. Today’s global growth hubs must focus on environmentally sustainable development, improve education and labor force participation, and foster stable, transparent, and liquid real estate markets to become tomorrow’s Resilient Cities, notes Paul Tostevin, director and head of Savills World Research.

About the Riyadh Region

The Riyadh region, as the economic powerhouse of Saudi Arabia and a prominent hub in the Middle East, is undergoing large-scale transformation, industry growth, and government initiatives.

Source: Invest Saudi Arabia

Contributing nearly 50 percent of Saudi Arabia’s non-oil GDP, various sectors within the region are bolstering the country’s diversification efforts and present substantial investment opportunities.

Investment opportunities exist across aerospace and defense, agriculture and food processing, chemicals, energy, environmental sciences, financial services, healthcare and life sciences, human capital innovation, industrial and manufacturing, information and communication technology, mining and minerals, pharmaceutical and biotech, real estate, tourism, and transport and logistics.

Top sectors of employment in Riyadh include wholesale and retail trade, construction, and administrative and support services.

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