Saudi Arabia's commercial real estate market is undergoing a paradigm shift, with Riyadh leading the way with record increases in office rental rates. This growth reflects investment momentum supported by the regional headquarters attraction program and Vision 2030 initiatives that are reshaping the country's economic and business landscape and making the capital a preferred destination for the regional headquarters of global companies.

Rental prices in Riyadh hit the highest increase

<a style=“color: #000000" office rental prices in Riyadh during the past 12 months achieved the largest increase in the Kingdom, with first-class office rents increasing by 31%, reaching about 2604 Saudi riyals per square meter, according to the report of the global real estate consultancy Knight Frank".

Night Frank

In contrast, Jeddah saw a smaller increase of 2.9%, bringing the price of luxury office rents to SAR 1,235 per square meter, while second-tier rents rose by 3.8% to SAR 810 per square meter. Dammam recorded a slight increase of 2.2% in rental prices, reflecting the growing demand for office space across the Kingdom."

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HQP boosts demand in Riyadh

The surge in rental prices in Riyadh is attributed to the Headquarters Program, which has become a key driver of increased demand for office space. To date, 517 global companies have committed to establishing their regional headquarters in the Kingdom, surpassing the 2030 target of 480.

This momentum is expected to lift Riyadh's total office space by an additional one million square meters, reaching 6.3 million square meters by 2026, making the capital a major hub of economic and commercial activity in the region.

This momentum is expected to lift Riyadh's total office space by an additional one million square meters, reaching 6.3 million square meters by 2026.

Different occupancy rates between Riyadh and Jeddah

Despite the rise in rental prices, Riyadh has maintained high occupancy rates, as the market is perceived as an attractive investment destination. In Jeddah, the office market showed stable growth thanks to increased demand for office space, with occupancy rates for Class I offices reaching 94%, while Class II occupancy rates rose to 90%.