SAR2.729 Billion: Diriyah Awards Contracts for Five Hotels, Three Residences

Summary

• Diriyah Company awarded SAR2.729 billion in contracts for five hotels and three residential assets.
• The buildings sit in Diriyah Square, part of the SAR237 billion urban development project outside Riyadh.
• Together they add 413 hotel rooms and 34 branded residences to Diriyah's hospitality portfolio.

The latest

Five luxury hotels and three residential assets in Diriyah Square will be built under two construction contracts worth a combined SAR2.729 billion, Diriyah Company announced. The awards cover facades, blockwork, fit-out, mechanical, electrical and plumbing works, and external works across all eight properties. Group CEO Jerry Inzerillo said the announcement marks another milestone in building out Diriyah's portfolio of globally recognized hotels and residences.

Details

• The first contract: MAN Enterprise Al Saudia LLC and Al Majal Al Arabi Group, operating as MAN and MAG JV, will develop three hotels and two residential assets under a contract valued at SAR1.324 billion, according to Saudi Press Agency. It is the smaller of the two awards announced on October 5.
• The second contract: Urbacon Saudi Company S.P.C. received SAR1.406 billion to develop three hotels and one residential asset, the larger share of the package. Combined, the two contracts cover eight separate properties inside Diriyah Square, the development's central district.
• The scope: Both contracts carry the same work scope: building facades, blockwork, fit-out, mechanical, electrical and plumbing systems, and external works for each property. Diriyah Company did not disclose a completion timeline or delivery schedule for either package.
• The room count: The combined development will deliver 413 luxury hotel rooms and 34 branded residential units, according to the company. The operators and brands attached to the individual hotels were not named in the announcement.
• The targets: Once finished, the assets are intended to support Diriyah's stated goal of attracting 100,000 residents and 50 million visits a year when the full SAR237 billion urban development project is complete. The company did not give a date for that completion.
• The track record: Both contractors have held earlier Diriyah mandates. Urbacon was part of an SAR8 billion joint venture covering four additional hospitality assets and the Royal Diriyah Equestrian and Polo Club in Wadi Safar.
• The other precedent: MAN and MAG JV previously won a SAR917 million contract to build the Grand Mosque in Diriyah, according to Saudi Press Agency. The new SAR1.324 billion award is roughly 44% larger than that earlier mandate.
• The executive line: Inzerillo framed the awards as part of a continuing build-out rather than a one-off, saying the company is advancing its "world-class portfolio of globally renowned hotels and residences in Diriyah."

Background

Diriyah sits northwest of Riyadh on the site of the first Saudi state. The SAR237 billion development is one of the kingdom's flagship giga-projects, pairing heritage areas with new hotel, residential and retail districts, of which Diriyah Square is a central component.

Between the lines

The two awards are construction-phase contracts covering facades, fit-out and building systems rather than groundwork, which places these eight assets past the structural stage. Re-engaging contractors already holding the SAR8 billion hospitality joint venture and the SAR917 million Grand Mosque mandate suggests Diriyah is consolidating delivery around a small group of firms already embedded on site.

What's next

Watch for construction start dates, named hotel operators for the five properties, and whether Diriyah Company issues further awards to the same two contractors as Diriyah Square moves toward delivery.

Source: Saudi Press Agency (SPA)