Riyadh leads Saudi Arabia’s commercial real estate growth with 23% rise in office rents

Strengthening the real estate sector is one of the key goals outlined in Saudi Arabia’s Vision 2030 agenda. 

June 30, 2025

Average rents for office spaces in Riyadh saw an annual rise of 23%

Jeddah’s total office stock is expected to rise 1.8 million sq. meters by 2027

RIYADH: Saudi Arabia’s commercial real estate sector is witnessing exponential growth, with rents for Grade A office spaces in the Kingdom’s capital reaching SR2,700 ($719.95) per sq. meter by the end of March, an analysis showed. 


In its latest report, global real estate consultancy Knight Frank said average rents for office spaces in Riyadh witnessed an annual rise of 23 percent by the end of the first quarter, driven by the success of government-led initiatives, including the ambitious regional headquarters program.


Strengthening the real estate sector is one of the key goals outlined in Saudi Arabia’s Vision 2030 agenda, as the nation aims to position itself as a leading business and tourism destination by the end of the decade. 


The Kingdom’s Real Estate General Authority expects the property market to reach $101.62 billion by 2029, with an anticipated compound annual growth rate of 8 percent from 2024.



Saudi Arabia’s regional headquarters program offers benefits to international firms, including a 30-year exemption from corporate income tax. File/SPA

“Saudi Arabia’s economic momentum continued to strengthen across key sectors in 2024, underpinned by rising private sector activity,” said Faisal Durrani, partner — head of research for the Middle East and North Africa at Knight Frank. 


According to the report, the Kingdom’s Grade A office rents witnessed an occupancy level of 98 percent by the end of March. 


Grade B rents grew by 24 percent year on year by the end of the first quarter, while the occupancy level of these spaces stood at 97 percent. 


Grade A office spaces command higher rents than the area average, thanks to their prime locations, modern infrastructure, and newer construction.


In contrast, Grade B office spaces are more affordable, offering a lower-cost alternative to Grade A units.



Average daily rate in Madinah reached SR891 by the end of the first quarter. File/SPA

The report further said that around 600 companies have announced plans to establish their regional headquarters by the end of February, significantly boosting demand for prime office spaces. 


Saudi Arabia’s regional headquarters program offers benefits to international firms, including a 30-year exemption from corporate income tax and withholding tax on headquarters activities, as well as discounts and support services. 


“A total of 14,303 foreign business investment licenses were issued during 2024, a 67 percent increase from 2023, marking the highest annual figure on record and underscoring the sustained appeal of Saudi Arabia to global corporates and investors,” said Durrani. 


The analysis added that Jeddah is also experiencing significant growth in the commercial real estate sector, with both Grade A and Grade B occupancies reaching 95 percent by the end of March. 


Knight Frank said Grade A office rents in Jeddah reached SR1,280 per sq. meter, marking a 4 percent year-on-year growth, while Grade B office rents grew by 6 percent to reach SR845 per sq. meter. 


Jeddah’s total office stock is expected to rise from 1.6 million sq. meters this year to 1.8 million sq. meters by 2027.


“As more companies expand their footprint across Saudi Arabia, Jeddah is attracting a growing number of regional and local firms. This rising interest is being supported by a healthy office development pipeline,” said James Hodgetts, partner — occupier strategy and solutions at Knight Frank.

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