Riyadh is one of the top 15 fastest-growing cities according to the Savills Growth Hubs Index. This recognition highlights the city's rapid development and its potential for future growth.
RIYADH'S POPULATION GROWTH
Riyadh, Saudi Arabia's capital city, offers a wide range of opportunities. From new development and business expansion, the Saudi Vision 2030 is fuelling this.
The prospects that this vision creates translate into Riyadh being the only non-Asian city in the top 15 Growth Hubs list. These prospects are clear too with Riyadh expected a population growth of 26% over the next ten years. This will increase the population from 5.9 million to 9.2 million.
So the strong population growth and the Saudi Vision 2030 ambitions make way for increased spending. Here the Saudi government will continue spending on infrastructure projects. They will also improve amenities and services to accommodate the growing population.
SAUDI EMPLOYMENT POTENTIAL
Richard Paul, Head of Professional Services & Consultancy Middle East, highlighted the city's employment potential. Paul also emphasised that Saudi Arabia has a population of around 36 million, with 67% under the age of 35. So, this young population will have strong spending power and employment potential over the next decade.
FOREIGN INVESTMENT INTO SAUDI ARABIA
Saudi government data shows a 5.6% increase in foreign direct investment (FDI) in Saudi Arabia in the first quarter of 2024. The net inflow of FDI reached SR9.5 billion ($2.53 billion). Ramzi Darwish, head of Savills in Saudi Arabia, attributes this growth to several factors. These factors include 30-year tax relief for regional headquarters. They also include the appeal of an expanding market, and a range of promising prospects too.
CORPORATE INTEREST IN RIYADH
Riyadh has seen a remarkable surge in corporate interest too. In 2023, over 180 foreign companies established their regional headquarters in the city. This surpassed the initial target of 160. So, this growing confidence reflects the strong potential of the Saudi capital.
SAVILLS GROWTH HUBS INDEX
The Savills Growth Hubs Index identifies cities with rising wealth and expanding economies. It examines the economic strength pillar and forecasts growth to 2033. Indian and Chinese cities dominate the top 15, with five spots each. Vietnam has two cities in the top 15, while the Philippines, Bangladesh, and Saudi Arabia each have one.
REAL ESTATE IMPLICATIONS
The global shift in growth from west to east has key implications for real estate. New centres of innovation will become magnets for growing businesses. This will drive demand for offices, manufacturing, logistics space, and homes. Rising personal wealth and disposable incomes also play a key role, creating opportunities for new retail and leisure developments.
ASIA'S ECONOMIC TRANSFORMATION
Savills notes how Asia's economic base is transforming. In particular, there's an increased emphasis on tech-driven growth. This underpins the dominance of the region's cities in the rankings. Planned infrastructure investment and strategies to improve connectivity and business competitiveness are also key factors. So as well as the MENA region, the Asian market offers attractive prospects too.
FUTURE GROWTH REQUIREMENTS
Economic performance and population growth are promising indicators of future growth. Yet, cities need to consider other factors to succeed. Paul Tostevin, director and head of Savills World Research, emphasizes the importance of several factors here. In particular, he points to sustainable development, improving education and labour force participation, and facilitating stable, transparent, and liquid real estate markets.
RIYADH: A FAST-GROWING CITY WITH HUGE POTENTIAL
Riyadh's ranking among the top 15 fastest-growing cities highlights its significant potential for future growth. The city's population growth, employment potential, and increasing foreign investment are driving its development. With the right strategies in place, Riyadh can continue to thrive as a vital MENA regional hub.
