Saudi Arabia's Dur Hospitality awards $22m contract for residential complex in Riyadh

Agreement covers construction of 75 villas in Riyadh, with the project financed through Islamic credit solutions

The Riyadh skyline. Saudi Arabia's Dur Hospitality signed a contract with Al Murshid Contracting Group to construct a luxury residential compound in Riyadh. Reuters

Saudi Arabia-listed Dur Hospitality Company has awarded an 82.5 million Saudi riyal ($22m) contract to Al Murshid Contracting Group for the construction of a luxury residential compound in Riyadh, amid a rise in demand for high-end properties in the kingdom's capital.

The 18-month contract covers construction, finishing and electromechanical work on 75 "smart" villas located near the northern gate of the diplomatic quarter in Riyadh and close to some of the major government authorities and departments, Dur Hospitality said in a filing to the Saudi stock exchange (Tadawul) on Wednesday.

"The expected positive financial results of the project will start from the third quarter of 2023," the company said.

Saudi Arabia is working on a development plan to transform Riyadh into a major global city economy by 2030.

As part of the strategy, the kingdom aims to grow the capital into one of the top 10 city economies globally, doubling its population to 15-20 million, while increasing the number of visitors to more than 40 million by 2030, the Royal Commission for Riyadh City has said.

Authorities will finalise the Riyadh 2030 development strategy next year, the Saudi Press Agency reported on Tuesday.

Riyadh-based Dur Hospitality, which was established in the 1970s, has a market capitalisation of 31.5 billion riyals, figures compiled by Tadawul show.

The luxury villas project will be financed through Islamic credit facilities known as Tawarruq, Dur Hospitality said, adding that construction will take place on land owned by the company on Riyadh's King Khalid road.

Meanwhile, the Riyadh 2030 strategy will be carried out through 26 sectoral programmes, including more than 100 initiatives and 700 pioneer projects across sectors and in different parts of the city, aimed at transforming the city into one of the most liveable places in the world.

Several new projects are under way in Riyadh. New developments include the $20bn Diriyah Gate Project with 20,000 housing units, $17bn King Salman Park community with 12,000 units as well as an $8bn mega entertainment project, called Qiddiyah, consultancy Knight Frank said in a report in August.

Other schemes include the $7.8bn King Abdullah Financial District, $3.2bn Mall of Saudi being developed by the UAE’s Majid Al Futtaim Group and The Avenues Mall.