The office market is booming in Riyadh by multiple folds in 2024, fueled by increasing demand for prominent rental increases, as per the 3rd quarter Savills report. Riyadh’s office market is becoming a business hub as the efforts to diversify the economy beyond oil increase and also provide a stepping stone for international companies to come set up here.
The report further indicates that Riyadh has enjoyed a remarkable occupancy rate in its office markets, mainly Grade A offices, which have reached 98%. Such high demands have resulted in the increase of the rental rates by 19% year-on-year within the prime areas. From the perspective of sectors involved, Technology, Media, and Telecommunications (TMT) represented about 40% of lease transactions, followed by the Consulting and FMCG sectors at 20% each.
Riyadh’s office market is basically a barometer of the city’s critical role in the pursuance of Saudi Arabia’s Vision 2030,” Amjad Saif, head of transactional services at Savills Middle East, says. As companies from a diverse set of sectors continue moving into the city, Riyadh becomes one of the principal gateways through which businesses can establish themselves with great depth in the Middle East.
The incentives from Saudi Arabia’s Regional Headquarters (RHQ) program have provided for example tax benefits and expedited visa processing. While investment system update planned for the year 2025 will ease regulatory restrictions, posing the kingdom to be even more attractive.
With more demand for flexible office spaces, especially those below 250 square meters in size, Riyadh will add over 1.6 million square metres of Grade A office space by 2028. This addition will include major developments like the Prince Mohammed Bin Salman Nonprofit City and will help contain rent growth and give tenants more options in the future.
