Riyadh ranks among the top 15 fastest-developing cities, shows index

Riyadh has been named one of the top 15 fastest-growing cities by 2033, according to the Savills Growth Hubs Index, part of Savills’ global thought leadership programme, Impacts.

The Saudi capital’s inclusion highlights the city’s significant potential for development and business expansion, driven by Saudi Vision 2030.

“Saudi Arabia boasts a population of around 36 million people, with 67 per cent under the age of 35. The employment potential and spending power of this segment over the next decade is enormous,” said Richard Paul, head of Professional Services & Consultancy Middle East, Savills.

All eyes on Riyadh

Riyadh, the only non-Asian city in Savills’ Top 15 Growth Hubs Index, is projected to see a 26 per cent population growth, rising from 5.9 million to 9.2 million in the next decade.

This population boom is expected to spur continued government investment in mega infrastructure projects and improvements in amenities and services.

Supporting this growth, Saudi Arabia has seen a notable increase in foreign direct investment (FDI). Government data showed a 5.6 per cent rise in net FDI inflows to SAR9.5bn ($2.53bn) 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 attracting international companies,” said Ramzi Darwish, head of Savills in Saudi Arabia. “Riyadh is experiencing a remarkable surge in corporate interest, with over 180 foreign companies establishing their regional headquarters in 2023, surpassing the initial target of 160.”

Cities that were among the top 15 in Savills Growth Hubs Index

The Savills Growth Hubs Index complements the Resilient Cities Index by examining economic strength and projecting it to 2033 to identify high-growth cities. Indian and Chinese cities dominate the top 15, each securing five spots, followed by cities in Vietnam, the Philippines, Bangladesh, and Saudi Arabia.

Paul Tostevin, director and head of Savills World Research, commented, “In economic terms, cities in India and Bangladesh are set to average GDP growth of 68% between 2023 and 2033, followed by those in Southeast Asia, including Vietnam and the Philippines, at 60 per cent.”

“As global growth pivots from west to east, the real estate implications for cities multiply. New centres of innovation will become magnets for growing and scaling businesses, driving demand for offices, manufacturing and logistics space, and homes. Rising personal wealth and disposable incomes will fuel opportunities for new retail and leisure developments,” Tostevin added.

The transformation of Asia’s economic base, with its increased emphasis on tech-driven growth, underpins the dominance of the region’s cities in the rankings. However, planned infrastructure investments and strategies to improve connectivity and business competitiveness are also key factors.

While economic performance and population growth are promising indicators of future growth, Tostevin cautioned, “Today’s global growth hubs won’t automatically turn into tomorrow’s Resilient Cities. They’ll need to consider pathways to environmentally sustainable development, improve education and labour force participation, and facilitate stable, transparent, and liquid real estate markets.”