Riyadh has emerged as one of the top 15 fastest-growing cities by 2033 according to the Savills Growth Hubs Index.
The report, part of Savills’ global thought leadership programme Impacts, highlights Riyadh as the only non-Asian city in the top 15 list. The city’s growth potential is linked to a projected 26 percent population increase, expected to reach 9.2 million from the current 5.9 million over the next decade.
Richard Paul, Head of Professional Services & Consultancy Middle East said, “Saudi Arabia boasts a population of around 36 million people and, astonishingly, 67 percent are under the age of 35. The employment potential and ultimate spending power of this segment of the population over the next decade are enormous.”
The growth forecast comes as Saudi Arabia continues to push forward with its Vision 2030 economic diversification plan. Recent government data showed a 5.6 percent increase in foreign direct investment (FDI) to SAR9.5 billion ($2.53 billion) in the first quarter of 2024 compared to the previous year.
Riyadh’s regional business hubRamzi Darwish, head of Savills in Saudi Arabia said, “The 30-year tax relief for regional headquarters, expanding market, and promising prospects are attracting international companies and reinforcing Riyadh’s position as a vital regional hub for leading businesses across diverse industries. Riyadh is experiencing a remarkable surge in corporate interest, with over 180 foreign companies establishing their regional headquarters in the city in 2023, surpassing the initial target of 160. This growing confidence reflects the robust potential of the Saudi capital.”
The Savills Growth Hubs Index, a companion to the Resilient Cities Index, examines economic strength forecasts to 2033. Indian and Chinese cities dominate the top 15 list with five spots each, followed by Vietnam with two, and the Philippines, Bangladesh, and Saudi Arabia with one each.
Paul Tostevin, director and head of Savills World Research said, “In economic terms, cities in India and Bangladesh are set to average GDP growth of 68 percent between 2023 and 2033, followed by those in Southeast Asia, including Vietnam and the Philippines, at 60 percent.”
“As global growth pivots further from west to east, the real estate implications for cities multiply. The new centres of innovation will become magnets for growing and scaling businesses, and this will underpin demand for offices, manufacturing and logistics space, and homes. Meanwhile, rising personal wealth and disposable incomes will drive opportunities for new retail and leisure developments,” he added.
“Today’s global growth hubs won’t automatically turn into tomorrow’s Resilient Cities. For this, they’ll need to consider their own pathways to more environmentally sustainable development and improve education and labour force participation. They’ll also need to facilitate stable, transparent, and liquid real estate markets,” Tostevin concluded.
