Knight Frank Real Estate Advisors has revealed continued strong momentum in the Kingdom's office market, with the class A office rents in Riyadh recording a 15.1% annual increase during the third quarter of 2025.Class A office rents in Riyadh recorded an annual increase of 15.1% during the third quarter of 2025, as the sector experiences an extended boom driven by government investments, megaprojects and the regional headquarters program.
Riyadh's Class A office rents recorded an annual increase of 15.1% during the third quarter of 2025, at a time when the sector is experiencing an extended boom driven by government investments, megaprojects and the regional headquarters program.
Demand for premium, ESG-compliant office space in Riyadh, Jeddah and Dammam is accelerating dramatically, creating a market characterized by high rents and a significant shortage of supply.
According to the report, Riyadh continues to consolidate its position as the commercial heart of the Kingdom, with Class A office rents averaging around SAR 2,750 per square meter, while Class B rents increased by 16.5%, amid unprecedented demand levels. According to the report, Riyadh continues to consolidate its position as the Kingdom's commercial heart.
<Knight Frank's Office Market Review GCC 2025 report indicates that the response of regional and global companies to high-quality, sustainable office standards is driving rents and occupancy rates to near-record levels in key GCC markets. The data also shows double-digit rental growth in Saudi Arabia, Dubai and Abu Dhabi, with recent projects such as the HP Tower on Yas Island approaching full occupancy.
Faisal Durrani, Partner and Head of Research in the Middle East and North Africa, said the lack of office supply continues to support strong rental growth, noting that government initiatives and economic diversification strategies are fueling growth in the non-oil sector, driving demand for offices that meet quality, governance and sustainability standards. Faisal Durrani, Partner and Head of Research in the Middle East and North Africa, said
Durrani added that this shortage is likely to change in the coming years with office supply in Riyadh expected to increase by 60% by 2027, with total inventory exceeding 10 million square meters, and in Dubai with an additional 13.2 million square feet expected to be delivered by 2030. Durrani added that this shortage is likely to change in the coming years.
James Hodgetts, Partner, Tenant Strategy Management, said the trend towards quality is a common factor across the GCC markets, with major multinationals and corporates favoring sustainable and adaptable space, reflecting continued confidence in the region's economic prospects. James Hodgetts, Partner, Tenant Strategy Management, said.
Demand for office space accelerates
Office supply shortage
Rising occupancy rates
Hodgetts revealed that the shortage of premium office space is manifested in near-full occupancy rates, with Class A buildings at 98% and Class B buildings at 95%, driven by rapid corporate expansion, with more than 780 multinational companies announcing their intention to establish their regional headquarters in Riyadh, led by US companies at 41%, followed by British 19%, Chinese 8% and German 4%.
Hodgetts revealed that the lack of premium office space is manifested in near-full occupancy rates, with Class A buildings at 98% and Class B buildings at 95%, driven by rapid corporate expansion. <Riyadh continues to lead the way, benefiting from Vision 2030 and the regional headquarters program, with a clear corporate priority on quality and long-term positioning. The report emphasizes that rising Class A and B rents reflect the increasing pressure on existing inventory, driving some tenants to turn to secondary options.
Amar Hussain noted that Riyadh continues to lead the way, benefiting from Vision 2030 and the regional headquarters program, with companies prioritizing quality and long-term positioning. Ammar Hussein, Associate Partner, Research, noted that one of the most notable recent developments was the adoption of a five-year rent freeze policy after Class A rents rose by 86% since 2019, noting that rents rose between 10% and 15% in prime locations just before the announcement, as a result of market expectations.
Ammar Hussein, Associate Partner, Research, noted that one of the most notable recent developments was the adoption of a five-year rent freeze policy after Class A rents rose by 86% since 2019.
Jeddah office market momentum
In Jeddah, the office market is gaining momentum driven by master plans and large-scale projects such as the billion-dollar Trump Plaza Jeddah project expected to open in 2029. Class A rents rose slightly by 1.3% to SAR1251 per square meter with an occupancy rate of 92%, while tenants in Jeddah are focusing on value-based decisions and flexible lease structures.
Hussein adds that tenants in Jeddah are focusing on value-based decisions and flexible lease structures. <Hussein adds that the Kingdom's ambitious reform agenda, regional headquarters program, and the massive movement of mega-projects - whose construction contracts have totaled $196 billion since 2016 - have created a competitive environment for Class A space. The report predicts that total office inventory in Riyadh, Jeddah and Dammam will rise from 9.7 million square meters in 2025 to 15 million square meters by 2028, with Riyadh accounting for about half of the new supply, although the short-term outlook still points to supply shortages and accelerating rents.
