RIYADH: Saudi Arabia’s capital is rapidly transforming into a leading global wealth hub, fueled by the Kingdom’s successful economic diversification under Vision 2030, a recent Knight Frank report said.

The Riyadh edition of the “Emerging Wealth Hub” series noted that the Saudi capital is transitioning from an oil-dependent economy to a powerhouse for finance, culture, and lifestyle, attracting multinational corporations, investors, and expatriates.

Surging demand for commercial and residential real estate, coupled with major infrastructure projects, is positioning Riyadh as a future-ready super hub.

A key driver has been the Regional Headquarters Program, which has already exceeded its 2030 target, with 600 global firms, including Bechtel, PwC, and Northern Trust, setting up regional bases in Riyadh. 

This influx has pushed Grade-A office vacancy rates down to just 2 percent, while prime office rents have skyrocketed by 23 percent in the past year and 84 percent since 2020.

The city’s booming startup ecosystem, supported by government incentives, advanced digital infrastructure, and a growing talent pool, complements its rise as a financial and business epicenter.

Amar Hussain, associate partner in research for the Middle East and North Africa region at Knight Frank, noted that Riyadh’s strategic vision, economic growth, and commitment to sustainability “positions it as a leading global wealth hub of the future, attracting talent, investment and tourism on an unprecedented scale.”

He added: “Its global positioning as a leisure destination will only increase further when the eyes of the world turn to the city for the 2030 World Expo and the 2034 FIFA World Cup.”

According to the report, the Kingdom issued over 160,000 new business licenses in the last quarter of 2024 — a 67 percent annual increase — bringing the total number of registered businesses to 1.6 million. The national unemployment rate has fallen to a historic low of 7 percent.

Partner and Head of Research for the MENA region at Knight Frank, Faisal Durrani, said: “The private sector is booming, with new business licenses up by two-thirds in a single year and vacancy rates for grade-A offices among the lowest in the world.” 

Durrani added: “This wave of entrepreneurialism is both a result of and a catalyst for Riyadh’s evolving business environment, and the city’s ability to attract human and financial capital is accelerating its emergence as a future-ready global wealth hub.”

To accommodate future demand, Riyadh’s office space is projected to nearly double from 5.5 million sq. meters to 9.8 million sq. meters by 2027, supported by government-backed infrastructure projects and growing institutional investment.

In an interview with Arab News in June, Emmanuel Durou, technology, media, and telecommunications leader at Deloitte Middle East, highlighted the Kingdom’s supportive business environment, which includes government incentives, substantial funding mechanisms such as venture capital and private equity, and vibrant incubator ecosystems, including Garage 46 and Impact 43.

Also speaking to Arab News in June, Jasem Al-Anizy, partner in corporate finance at Addleshaw Goddard KSA, shed light on the legal structures that are proving effective in the nation.

“Saudi startups have historically preferred an offshore ring-fencing of intellectual property assets by holding and protecting intellectual property interests in a standalone sister company based in an offshore jurisdiction,” he explained to Arab News. 

“This has helped startups in scaling globally and simplifies exit strategies,” Al-Anizy said. 

Sustainability and liveability take center stage 

Riyadh is integrating sustainability into its rapid expansion, with initiatives like the King Abdullah Financial District — the world’s largest LEED Platinum-certified mixed-use business hub — and the Mostadam green building rating system. The Green Riyadh program, which aims to plant 7.5 million trees, is enhancing air quality and urban livability.

“Urban mobility in Riyadh is being redefined through major investments in infrastructure,” said Harmen De Jong, regional partner and head of consultancy for the MENA region at Knight Frank.

Major transport upgrades, including the Riyadh Metro, the expansion of King Khalid International Airport, and the 220-km Sports Boulevard, are improving connectivity and reducing congestion.

“These transport enhancements are not only reducing congestion but also improve air quality and overall urban resilience,” De Jong said, adding: “Combined with the rise in major multinationals opening offices in the city and high-quality residential and leisure developments, Riyadh has a uniquely compelling offer as a live, work, play destination both within the GCC (Gulf Cooperation Council) and globally.” 

Leisure, tourism, and global events fuel growth 

Riyadh is fast becoming a premier leisure destination, with Riyadh Season 2024 drawing 18 million visitors. The city’s successful bids to host the 2030 World Expo and the 2034 FIFA World Cup are set to amplify its global profile, with the Expo alone expected to generate an economic impact of $94.6 billion. 

Tourism is booming, with Saudi Arabia surpassing its original Vision 2030 target by welcoming 106.2 million visitors in 2023. The new goal is 150 million visits by 2030, supported by visa-free entry for 66 countries and the launch of Riyadh Air. Hotel supply is expanding rapidly, with 30,000 rooms expected by 2027.

Inbound tourism spending in the Kingdom surged to a record SR153.61 billion ($40.95 billion) in 2024, marking a 13.82 percent annual increase, according to data from the Saudi Central Bank.

The rise also pushed the Kingdom’s travel balance surplus to its highest annual level yet, SR49.78 billion, up 7.81 percent from the previous year.

Residential market soars amid surging demand 

Riyadh’s residential sector is experiencing unprecedented growth, with apartment prices increasing by 75 percent and villa costs by 40 percent since 2019. In 2024 alone, prices rose by 10.6 percent for apartments and 6.3 percent for villas, while sales volumes jumped 44 percent year-on-year. 

New Premium Residency Visas, linked to property ownership, are opening the market to international investors. With 305,000 new homes needed in the next decade, developers and investors have significant opportunities ahead.

Knight Frank’s Hussain said: “With evolving buyer profiles, increasing international interest and sustained local demand, Riyadh’s housing market is positioned for continued expansion and diversification.”

He added: “Our latest projections highlight the scale of opportunity for investors and developers in one of the region’s fastest-moving residential markets.”