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Riyadh is expected to see the addition of more than 1.6 million square metres of Grade A office space by 2028, driven by heightened demand, Savills said in its third quarter 2024 report.
Major developments such as Prince Mohammed bin Salman Nonprofit City and Diriyah Gate are expected to reshape the city’s office landscape, the report said, adding the expansion of these zones will likely moderate rental growth and provide tenants with more choices in the years to come.
The office market in the Saudi capital is quickly emerging as a regional powerhouse for business growth, supported by rising demand for premium office spaces and a robust economic outlook, said Ramzi Darwish, Head of KSA at Savills Middle East.
“The combination of high occupancy rates and escalating rental values demonstrates Riyadh’s appeal to regional and international companies, especially those looking to capitalise on the Kingdom’s pro-business environment and regulatory advancements,” he said.
Occupancy levels in Grade A spaces reached 98 percent, reflecting high demand for premium office locations.
Average rental values for Grade A office space have seen substantial year-on-year growth, with key areas experiencing increases of up to 19 percent.
This steady rise underscores Riyadh’s attractiveness across key sectors, including technology, media, and telecommunications (TMT), which accounted for 40 percent of leasing activity, followed by consulting and FMCG sectors at 20 percent each, Savills said.
(Writing by P Deol; Editing by Anoop Menon)
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