Knight Frank, a global real estate consultancy, has revealed that price rents for Grade A office space increased by 8% in Riyadh, 3.8% in Jeddah, and 3.5% in the Dammam metropolitan area over the past 12 months, supported by the growing Saudi economy supported by Vision 2030.5 percent in the Dammam metropolitan area over the past 12 months, supported by a growing Saudi economy driven by Vision 2030 that has boosted demand for office space and units across the Kingdom, according to the firm's Summer 2024 Saudi Commercial Market Review.
Rental rates for Grade A office space increased by 8 percent in Riyadh, 3.8 percent in Jeddah and 3.3 percent in Dammam.
Faisal Durrani, Partner and Head of Research, MENA, explained that the commercial office market is one of the biggest beneficiaries of Vision 2030, with local demand for office space on the rise. He pointed to a significant shortage of prime office options, with vacancy rates as high as 97% in Riyadh, forcing some companies to settle for less than ideal spaces, resulting in a significant increase in rental rates for Grade B offices by 26% compared to the same period last year. Jeddah witnessed a similar phenomenon, with Grade A office rents rising by 19.3% since Q1 2023, driven by increased demand from the public sector.
<In the Dammam region, the office market continued to expand over the last 12 months to the end of Q1 2024, due to increased demand for office space. Grade A office rents increased by 3.5% to SAR 1,025 per square meter, while Grade B rents saw a slight increase of 1.6% to SAR 625 per square meter between Q1 2023 and Q1 2024. Average occupancy across Grade A office space increased by 5 percentage points to 85%, and Grade B occupancy levels increased by 3 percentage points to 73% over the same period.
