The $5.8 billion smart city opportunity emerging in Riyadh

Smart city technologies could generate more than $5.8 billion in Riyadh as Saudi Arabia invests heavily in infrastructure and urban development, according to a new report by real estate firm JLL.

The report, titled “Smart cities, smart investments?”, shows a direct link between technology deployment, financial returns, and city-wide economic growth.

Smart construction accounts for more than $3.8 billion of the projected value, making it the largest opportunity. With a projected payback period of 5.9 years, the technology could help improve efficiency across construction projects by reducing waste and delays as Riyadh undertakes large-scale development.

AI energy analytics is expected to deliver more than $1.8 billion in net present value, with a 4.9-year payback period. The technology can optimize heating, ventilation and air conditioning systems, which JLL estimates could reduce annual operating costs by 20% in Riyadh’s hot and arid climate.

Intelligent street lighting makes up the remaining opportunity, with a projected net present value of nearly $270 million. It has the shortest payback period of the three technologies at 1.3 years and could be used across new walkways, parking areas and other pedestrian infrastructure.

JLL says the benefits could extend beyond the direct financial returns of individual projects. Greater productivity, commercial activity, development, health and sustainability could add to the wider economic impact of smart technology.

The report comes as smart technologies become increasingly prevalent across construction and urban infrastructure worldwide. According to JLL, the strongest returns are likely to come when cities select technologies based on their specific needs rather than adopting a one-size-fits-all approach.

“Globally, the conversation around smart cities has been limited to their potential, framing these as a nice-to-have,” said Dr Matthew Marson, Managing Director EMEA & APAC, Technology Consulting at JLL, adding that the conversation should be more focused on performance to help city planners, investors, and developers create economic value.

“Smart technology generates measurable financial returns, can be deployed at scale, and solves real-world urban challenges…Treating this technology as critical infrastructure transforms it into a mature asset class, backed by real, local demand that investors can act on,” Marson added.

For Riyadh, the priorities reflect the demands of a city undergoing rapid development, including the need to manage energy consumption, improve construction efficiency and support expanding urban infrastructure.

The findings come as Saudi Arabia pursues major development under its Vision 2030, with large-scale projects reshaping the capital’s infrastructure and built environment.