The Commercial real estate in the Kingdom continues to cement its position as one of the leading beneficiaries of the ongoing economic transformations, supported by the expansion of the services sector and the growth of local and international companies. Amid growing demand for office and industrial space, rents are expected to continue rising in the coming years, particularly in major cities experiencing rapid economic activity, foremost among them Riyadh and Jeddah.
“BMI,” a subsidiary of ”Fitch Solutions,” has expressed optimism about the future of commercial real estate in Saudi Arabia, forecasting that demand for office and industrial space will remain strong through 2026, thereby supporting rent levels in the Kingdom’s major markets.
Riyadh Leads Commercial Real Estate Market Growth
According to the company’s estimates, Riyadh continues to lead the commercial sector’s growth, driven by increasing demand for high-quality offices, while the capital continues to face a shortage of Class A office space, which enhances the appeal of this type of real estate asset and supports rental levels.
BMI expects average rents for office rents in Riyadh to reach approximately $34.1 per square meter per month by 2026, while rents for premium office space could rise to about $47.7 per square meter.
Although the upward trend in rents continues, estimates indicate that the pace of growth will be more moderate compared to the previous year, as average rents are expected to rise by approximately 0.39% in 2026, compared to strong growth of 9.4% in 2025. This is attributed to the high price levels of recent years, which make year-over-year comparisons more challenging.
Continued Growth in Demand for Office Space
The growing demand for office space is driven by a range of economic factors, most notably the ongoing expansion of the services sector, the growth of private-sector activities, and the positive impact of the Regional Headquarters Program, which has encouraged many companies to strengthen their presence within the Kingdom.
The company also expects the services sector to achieve real growth in value added at an annual average of 3.2% through 2030, which should support companies“ expansion plans and increase their need for additional office space to meet their business requirements.
Given the limited supply of high-quality office space, prime office properties in Riyadh remain among the most attractive assets for tenants, a fact reflected in occupancy rates and rents.
Data from CBRE reinforces these trends, showing that occupancy rates for Class A offices in Riyadh remained at levels close to 98% during the first quarter of the year, while technology companies accounted for more than half of the recorded demand for office space.
Promising Growth Opportunities in Jeddah
In Jeddah, although the pace of activity is slower compared to the capital, the market continues to offer promising long-term growth opportunities, benefiting from the city’s position as a key economic and logistics hub on the Red Sea coast, as well as the ongoing expansion of government agencies and private companies.
BMI expects office rents in Jeddah to grow by 1.52% in 2026, compared to a 7.2% increase in 2025. Despite the slower pace of growth, sustained demand and balanced supply levels continue to support the market.
