Riyadh leads Saudi real estate surge with 18% rise in office rents

RIYADH: The real estate market in Riyadh is experiencing significant growth, with average rents for office spaces rising 18 percent year on year in the fourth quarter of 2024, according to an analysis. 

In its latest report, real estate services firm CBRE said that average rates in Jeddah and Dammam also witnessed a rise of 10 percent and 12 percent year on year over the same period.

The rapid increase in average rents for office space in Riyadh signifies the city’s expanding economic activity, driven by both a thriving private sector and ongoing government initiatives aimed at positioning the capital as a global business and investment hub.

It also underscores the progress of Saudi Arabia’s growing real estate sector which is expected to reach a market value of $101.62 billion in 2029, with an anticipated compound annual growth rate of 8 percent from 2024. 

“The high occupancy rates across the capital’s prime office districts reflect the strong prevailing demand, driven by the Kingdom’s thriving non-oil economy which is a key component of the government’s Vision 2030 diversification strategy,” said CBRE. 

It added: “Despite the rapidly rising rents, global occupiers and investors remain attracted to the Kingdom, as reflected in the continuation of the RHQ (regional headquarters) license growth through the fourth quarter of 2024.” 

In January, Saudi Arabia’s Investment Minister Khalid Al-Falih said that 571 international companies have opened Middle East bases in the Kingdom — exceeding the original target of 500 firms by 2030.