The King Abdullah Financial District (KAFD) does not go unnoticed. The geometric profile of its towers has quickly become a landmark of Riyadh’s skyline. As with similar districts around the world, it projects modernity, characterised by a slender vertical order with an architectural edge. It is built to intrigue, not intimidate. 

But it has been a long time in the making. First announced in 2006, it struggled for years to gain traction. The pace of development picked up at the turn of the previous decade as Saudi Arabia became more assertive with its economic development ambitions. 

“Business goes where there is business,” says KAFD’s CEO Gautam Sashittal. 

The project 

Extending over a total 1.6 square kilometres, 40% of the area has already been developed into 95 properties with a gross floor area (GFA) of 1.6 million square metres. Office space makes up about 60% of its GFA, retail another 14%, and the remainder being shared between residential and hospitality spaces, as well as entertainment areas — including the country’s first cinema. 

Many of KAFD’s properties have just come onto the market, or are currently being fit out, giving the pristine look of an area gearing up for big things to come. Or at least, this is the ambition it is trying to project. 

Mr Sashittal expects around 100,000 people to be working and living in the district by the end of 2024 — a tremendous leap from today’s 15,000. He argues that the current trajectory of the Saudi economy will inevitably lift KAFD too. 

“It’s the largest economy in the region, as well as one of the fastest growing. There is a lot of investment happening across the country. KAFD is an obvious place for those businesses that want to benefit and participate in the growth of Saudi Arabia.” 

Saudi Arabia has undergone transformational change since the release of Vision 2030, the flagship strategy that Crown Prince Mohammed Bin Salman announced in 2016. The country’s Wahabbist precepts have been somewhat relaxed, creating, among other things, greater room for women in public life. Investment has been unleashed, with the Public Investment Fund (PIF) — which also owns KAFD — and other development funds planning to deploy trillions of dollars in direct investment to develop the Saudi economy and loosen its dependence on the oil industry. 

FDI wave 

Foreign investment has picked up rapidly. Since the launch of Vision 2030, the country has attracted greenfield foreign direct investment (FDI) projects worth $67.4bn in non-oil sectors, according to figures from investment monitor fDi Markets. That is more than the total it attracted in the same non-oil sectors in the 13 years until 2015, and more than any other country in the region from a pure capital expenditure perspective. In terms of non-oil FDI project numbers, the UAE’s lead in the region is rock-solid.

Also prodded by initiatives like Project HQ, which requires firms to establish a regional headquarters in the country to access business with the public sector, foreign firms have flocked to establish a stronger presence in the country, creating much momentum for business districts like KAFD. 

“Eighty percent of our available office space has been leased or pre-leased,” says Mr Sashittal. The list of new foreign tenants includes the likes of pharma group Pfizer, insurance firm Bupa and Kuwaiti investment firm Kamco Invest. The newcomers join an already numerous base of local tenants, which features the elite of the Saudi economic establishment, including PIF, state oil firm Saudi Aramco and SNB, the country’s largest commercial bank. 

KAFD’s skyscrapers are a visual metaphor of Saudi Arabia’s seemingly limitless ambitions. Now that the first construction phase is almost over, it comes down to bringing people to those towers to give substance to those ambitions. 

This article first appeared in the October/November 2023 print edition of fDi Intelligence