Market continues Commercial real estate Saudi Arabia's construction industry is growing at a remarkable rate, fueled by rising demand, improving financing conditions, and increased interest from foreign investors. According to the Global Construction Monitor report by Royal Institution of Chartered Surveyors (RICS) for the fourth quarter of 2024, the sector enters 2025 with positive momentum that reflects the Kingdom's position as one of the strongest commercial real estate markets globally.
Strong growth and growing demand:
Mohamed Moussa, board member of RICS Saudi Arabia, emphasized that Commercial real estate market The Kingdom has a positive outlook, with continued demand for all types of commercial real estate. He added that future indicators point to the continuation of this trend during the coming period.
According to the report, demand for commercial space recorded a net growth of +39%, driven by higher average demand from tenants across all sectors. Office properties led the way with +59%, followed by industrial +36% and retail +23%.
Improved funding conditions:
The report indicated that credit conditions have improved, with 59% of respondents seeing a slight improvement over the last quarter, while 9% emphasized that they have improved significantly. On the flip side, 27% considered credit conditions unchanged, while only 9% saw them deteriorate. This optimism reflects continued confidence in commercial real estate financing, supporting the sustainability of growth in the sector.
Growing interest from foreign investors:
Foreign investors continue to strengthen their interest in the Saudi market, with the level of interest increasing by +55%. The majority of respondents expect rental and capital growth to continue over the next three to twelve months. According to the report, 43% of respondents believe the market is in a recovery phase, while 19% believe it has peaked.
With continued strong demand, an improving financing environment, and increased investor interest, commercial real estate in Saudi Arabia looks set to continue its upward trajectory through 2025, cementing the Kingdom's position as a key investment destination in the global real estate sector.
