Construction

Global investors seek stake in Diriyah projects says CEO

By Pramod Kumar

September 30, 2024, 4:05 AM

Diriyah, a Unesco World Heritage site, is expected to receive funding of SAR12 billion from PIF next year, says CEO Jerry Inzerillo

The Diriyah Gate Development Authority is holding discussions with foreign investors interested in buying equity stakes in hotels and other real estate developments in the $63 billion Diriyah giga-project.

The Public Investment Fund (PIF)-backed developer has secured deals worth $1 billion with an Italian developer and a French company, CEO Jerry Inzerillo told Reuters.

The names and specifics of the deals were not disclosed.

Diriyah is being marketed as a historical, cultural and lifestyle destination and is part of Saudi Arabia’s broader goal of diversifying away from oil.

The Unesco World Heritage site, located outside Riyadh, has been backed by PIF investments of SAR20 billion ($5.33 billion) in 2023 and 2024 and is expected to another SAR12 billion next year, Inzerillo said.

Foreign investors have already purchased stakes in several projects in Diriyah, the CEO said.

There is strong interest from international investors, he said, adding that Diriyah will work with any country capable of delivering quality work and meeting timelines.

“A lot of people can see that it’s built, it’s doable; it’s no longer renderings, no longer ‘you wait and see’,” the CEO said.

Inzerillo admitted that investment priorities have changed due to upcoming events such as the World Expo 2030 set to be hosted in Riyadh. However, the pace and scope of the Saudi giga-projects have not been scaled back.

“It’s a realignment, a re-prioritisation… not a reduction,” Reuters reported, quoting Inzerillo.

Last month, rating agency S&P said Saudi Arabia is expected to see a pick-up in construction for its Vision 2030 projects and the services sector, driven by rising consumer demand and a growing workforce.

However, the vast scale and size of projects – estimated to be in excess of $1 trillion – suggest large funding requirements across the government and government-related enterprises, particularly the PIF.

As a result, the government is prioritising projects based on economic returns and reassessing timelines to prevent economic overheating and funding pressures, the rating agency said.