PIF-backed Diriyah Company considers Tadawul IPO by early 2027, CEO says

Projects at the historic site remain on budget and are proceeding on schedule, Jerry Inzerillo says

Salwa Palace at Al Turaif district of Diriyah, the first seat of power in Saudi Arabia. Bloomberg

Diriyah Company, the developer turning the historic Saudi city into a tourism giga-project, is considering an initial public offering on the Tadawul stock exchange by early 2027, as the kingdom seeks to develop non-oil sectors and attract international tourists.

The company is already generating revenue of 50 million Saudi riyals ($13.3 million), which it expects to "at least double" in 2024, after it opened substantial assets in 2022 and attracted more than one million visitors to the historic site of Al Turaif District, said Jerry Inzerillo, group chief executive of Diriyah Company.

Diriyah Company, which is a subsidiary of the Public Investment Fund, would list 100 per cent of its shares if it proceeds with the offering.

"We've hired lawyers and bankers ... we're putting the preliminary structure in place to evaluate what we have to do over the next short period of time to build up to an IPO that could be listed on the Saudi stock exchange," he said on the sidelines of the World Travel and Tourism Council's global summit, in Rwanda.

“We hope that within 36 months we’ll have a realistic window.”

Jerry Inzerillo, group chief executive of Diriyah Company, at the World Travel and Tourism Council's summit in Rwanda. Photo: WTTC

In January, Saudi Arabia’s sovereign wealth fund designated Diriyah as its fifth giga-project after the Neom, Red Sea, Qiddiya and Roshn developments.

The $63.2 billion project at Diriyah is set to transform the site into a major tourism destination.

Diriyah, the kingdom’s first seat of power, was built from mud bricks along the banks of Wadi Hanifa, north-west of Riyadh.

Diriyah, home to the Unesco World Heritage Site of At-Turaif, is the birthplace of the kingdom and the ancestral home of Al Saud royal family. On this site, the First Saudi State was established in 1727. The settlement of Diriyah, which dates back to 1446, was home to generations of leaders.

By 2030, the mixed-use destination will span 14 square kilometres and is set to house 42 hotels, more than 100 restaurants, nine museums and about 30,000 homes.

It is also expected to create 178,000 direct jobs and contribute 70 billion riyals directly to the national gross domestic product by the end of the decade, according to the PIF.

Saudi Arabia's first seat of power – Diriyah – was built from mud bricks along the banks of Wadi Hanifah, north-west of Riyadh. All Photos: Diriyah Gate Development Authority

The DGDA is restoring the region, starting with the historic Al Turaif district and then extending to multiple other sites, set to conclude in 2025

In 2010, Al Turaif district was declared a Unesco World Heritage Site, initiating a concerted effort to restore and make it ready for tourists

Founded in the 15th century, Al Turaif district offers a glimpse into the distinctive Najdi architectural style, unique to the heart of the Arabian peninsula

The DGDA has worked hard to preserve the archaeological ruins of Al Turaif, balancing conservation with public accessibility

The DGDA officially opened the Al Turaif district to the public in December 2022 and began welcoming local and international visitors to the historic district

The archaeological site at Wadi Safar Dam, a 60-square-meter extension of Wadi Hanifa, Diryah

“[Our] main objective is to study the historical landscape, to better understand the foundation of [the Kingdom of Saudi Arabia’s] social and economic development,” heritage management senior director for DGDA, Paola Pesaresi tells The National

Natural heritage, cultural heritage and community are the three keys to understanding life in the area. We go through the proper value assessment, with the support of the [local] communities, in order to have them at the centre of any decision making," Pesaresi adds

Founded around 1446, Diriyah served as the home of the Saudi royal family and later the capital of the First Saudi State

This eventually led to the creation of the First Saudi State, which caused Diriyah to rapidly increase in both size and wealth, becoming an influential modern state

Diriyah was later invaded during the Ottoman-Saudi War (1811–1818) where – after a six month-long siege, the city capitulated to the Ottomans, ending the First Saudi State. In 1824, the Second Saudi State was founded in Riyadh, just to the south of Diriyah

As part of its Vision 2030 strategy to diversify its economy away from oil, Saudi Arabia is seeking to attract more international tourists and become a global travel destination.

It aims to increase the contribution of the tourism sector to the kingdom's economy to 10 per cent by 2030, up from 3 per cent in 2019.

The kingdom expects to attract about 100 million domestic and international visitors this year, with the tourism sector contributing almost 6 per cent to its GDP in 2023, Tourism Minister Ahmed Al Khateeb said in October.

The country is also aims to attract 70 million overseas visitors a year by 2030, with the government investing billions of dollars in new tourist attractions, resorts, entertainment, new carrier Riyadh Air and the new King Salman International Airport in Riyadh.

A model of a local construction and renovation project in the Diriyah Gate Development Authority (DGDA) headquarters, Saudi Arabia. All photos: Bloomberg

Crown Prince Mohammed bin Salman is trying to turn the conservative kingdom into an investment powerhouse and attract businesses as part of his Vision 2030 plan to diversify from oil

A model of a construction project in Diriyah

A motorway runs past the site

Visitors look at a model of the project

The gateway to Diriyah

Visitors at Salwa Palace

A path at Salwa Palace

Part of the palace lit up at night

Salwa Palace is a tourist attraction

Salwa Palace in the At-Turaif district of Diriyah, Saudi Arabia.

The visitor centre in At-Turaif, Diriyah

Electric carts transport visitors to Salwa Palace

“We have several projects now that are not only on time and on budget, but are showing great promise," Mr Inzerillo said.

"At some particular point it’s going to be a big return. The PIF is a fund so we’re fortunate because it’s very rare in the world that natural and cultural heritage projects have good ROI [return on investment] like us."

He said the sales pitch to investors was entry into a G20 market with robust demand, a population of more than 30 million and the introduction at Diriyah of a "desirable commercial product".

Saudi Arabia is the sole bidder to host the 2034 Fifa World Cup and is also bidding to brings the World Expo 2030 to Riyadh.

"You’ve got these gigantic events that will infuse $1 trillion of capital from the public and private sector into Riyadh alone," Mr Inzerillo said.

The hospitality industry veteran dismissed any effect on the Diriyah project's future plans from global supply chain bottlenecks and labour shortages.

"We feel things are going extremely well," he said.

"Right now in November of 2023, remarkably, we're slightly ahead of schedule. If you do a snapshot of what I promised the King and the Crown Prince, we're six months ahead of schedule."

The project hired 27,000 construction workers, which will increase to 31,000 by the end of the year, and 2,000 staff. About 85 per cent of its workforce are Saudi citizens, 38 per cent are Saudi women and 14 per cent are from Diriyah.

Asked about the effect of the Israel-Gaza war on project progress and visitor numbers, Mr Inzerillo said: "We know the Crown Prince [Mohammed bin Salman] is working unbelievably hard on trying to find a peaceful solution to the region ... but our instructions are: 'We'll handle the diplomatic side of what's happening in the region, you focus on the goals of Vision 2030 and take care of what you're mandated to do.' So we have our marching orders."

The Diriyah Company will "open, ground-break and announce projects" In December every year until 2030, he said.

Next month, it will undertake a soft opening of its first hotel of 141 rooms.