As Saudi Arabia races to diversify its economy beyond oil, an ambitious project is quickly taking shape. The $64 billion Diriyah project which aims to transform the Saudi city of Diriyah, focusing on the area's history while developing a modern, sustainable environment is on track to be delivered as part of the Saudi Vision 2030.
Spread over 14.5 square kilometres, it blends luxury hotels, branded residences, retail pavilions, and other amenities essential to the building of a real community. Already open and trading, the visitor numbers to the project tells a great story. More than 3.5 million people have visited the UNESCO-listed At-Turaif site while Bujairi Terrace, the project’s first dining district, sees monthly footfall exceeding 120,000. The first luxury hotel, the Luxury Collection’s Bab Samhan, is already operational, with high occupancy and strong ADRs.
“The experience of what life will be like in Diriyah is now starting to be seen, recognized and felt by many,” says Kiran Haslam, chief marketing officer of Diriyah Company.
Sustainability
At the core of Diriyah’s vision is sustainability, both environmental and social, with its efforts earning the project LEED Platinum certification. With a gross floor area nearly six times the size of Dubai downtown, project leaders aim to create a truly mixed-use community where people will live, work and play but prioritising human-centric architecture rooted in traditional values of hundreds of years in the past.
“People lived more sustainably 300 years ago. They built from natural materials such as mud and they had a way of living that encouraged people to get out of our homes. Today's cities are all struggling from traffic, pollution and a lack of community. What we’re trying to do is go back to the roots of how people lived sustainably and recreate that,” Mohamed Saad, president of Diriyah Development Company says.
And to leave the surface a pedestrian-first environment with a traditional feel, the project invested heavily in an underground network of roads, utilities and parking. Motorised traffic is buried over several underground levels beneath Diriyah One, freeing the city streets for pedestrians.
The project also utilises mud brick construction which keeps thermal energy from reflecting in Riyadh’s harsh climate. The surrounding wadi, once a barren floodplain, is being reborn with 6.5 million indigenous plants, supported by desalinated water and smart irrigation systems.
Homes, hotels and branded residences
Diriyah’s hospitality pipeline alone spans over 13 hotels, ranging from ultra-luxury brands like Ritz-Carlton, Raffles, Baccarat and Six Senses, to lifestyle and gateway offerings like Moxy and Radisson.
But the real estate vision goes beyond hotels. Diriyah is developing 550 branded residences alongside its own Diriyah-branded apartments aimed at the rising middle class. Branded residential sales have seen exceptional take-up: the initial 106-villa Ritz-Carlton Residences sold out rapidly, followed by strong demand for Corinthia, Baccarat, and Raffles residences.
“There’s a huge appetite for well-designed homes that combine modern luxury with cultural values. The potential is huge. We are encouraged by the success we are seeing to increase our branded residences. Every opportunity we have in the masterplan, we consider adding branded residences,” Saad says.
He adds that each branded residence offering is tailored to a specific lifestyle/demographic. Corinthia villas, for example, offer large underground garages to suit family needs, speaking to cultural values that may call for multigenerational living.
Building a community
But Haslam stresses the importance of Diriyah’s own apartments, earmarked for those living and working in the area as he emphasised the importance of creating community for a growing middle class who seek to step on the property ladder at a different price point.
“We’re going into a phase where we start to launch our own unbranded homes. And that's really going to help to create a lot of the glue to the society here,” he says.
To build this society, Diriyah will comprise more than 100 restaurants, flagship luxury brands, co-working spaces, museums, fitness centres, clinics and leisure venues including an opera house and a 15,000-seat arena.
The Diriyah masterplan also integrates schools, a university and healthcare in its aim to foster an engaged local community
Investment opportunities
From an investment perspective, the opportunity is vast. Diriyah Development Company is actively seeking joint ventures, land sales and lease partners across hospitality, retail, and residential sectors.
“We have opportunities ranging from thousands of dollars to north of $20 billion,” says Saad. “Hotels are showing healthy returns of 9-10 per cent IRR depending on classification. We’re seeing strong balance sheets and performance from the assets we’ve already opened.”
Leading up to 2030, Diriyah is following a phased open-operate approach, with new areas and assets coming online between now and 2028.
“Our plan is that from 2028, museums, hotels, residences and retail spaces will all be integrated,” Saad says.
And the project’s proximity to Riyadh, one of the fastest-growing G20 capitals, is a key advantage, especially as King Khalid International Airport gears up to become one of the world’s busiest aviation hubs.
As Saudi Arabia pushes ahead with its Vision 2030 diversification agenda, project leaders stress that Diriyah stands out as a model of what its cities could become, blending cultural authenticity with modern liveability and futuristic sustainable design.