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Saudi Arabia Office Real Estate Market Size (2024 - 2029)

The Saudi Arabia office real estate market is experiencing significant growth, driven by government initiatives such as Vision 2030, which are attracting investors and increasing demand for commercial spaces, particularly Grade-A offices. The market's expansion is evident in the rising occupancy rates and rental prices, especially in Riyadh, the capital and commercial hub. Despite challenges, the market remains robust, with international firms relocating their headquarters to Saudi Arabia, further boosting demand. The government's commitment to its strategic goals ensures a continued upward trend in the market size, particularly in major cities like Riyadh and Jeddah, where rental yields are notably high.

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Market Size of Saudi Arabia Office Real Estate Industry

Saudi Arabia Office Real Estate Market Summary
Study Period 2020 - 2029
Base Year For Estimation 2023
Market Size (2024) USD 7.89 Billion
Market Size (2029) USD 11.65 Billion
CAGR (2024 - 2029) 8.11 %
Market Concentration Low

Major Players

Saudi Arabia Office Real Estate Market Major Players

*Disclaimer: Major Players sorted in no particular order

Saudi Arabia Office Real Estate Market Analysis

The Saudi Arabia Office Real Estate Market size is estimated at USD 7.89 billion in 2024, and is expected to reach USD 11.65 billion by 2029, at a CAGR of 8.11% during the forecast period (2024-2029).

  • In 2024, Saudi Arabia's office real estate market is witnessing a surge in demand and notable developments, especially in key cities like Riyadh, Jeddah, and Dammam. Riyadh's Grade A office rents have jumped 11.8% year-on-year, averaging SAR 1,975 (USD 525.55) per square meter, as reported in the Saudi Arabia Real Estate Market Review Q1 2024. This uptick in rental prices underscores the escalating demand for premium office spaces, with businesses flocking to the capital, spurred by initiatives like the Regional Headquarters Program under Vision 2030.
  • Jeddah is also seeing a significant uptick in office space demand, with Grade A rents soaring 13.6% year-on-year to an average of SAR 1,406 (USD 374.14) per square meter, as noted in the Saudi Arabia Real Estate Market Review Q1 2024. Jeddah's strategic position along the Red Sea and its stature as a commercial nexus are luring both domestic and global firms. Moreover, the city's allure is bolstered by ongoing key infrastructure projects, making it a prime destination for businesses eyeing market growth.
  • Dammam, though smaller than its counterparts, is carving a niche in the office real estate landscape. Grade A rents in Dammam rose by 8.0%, hitting SAR 1,017 (USD 270.62) per square meter in 2024, as highlighted in the Saudi Arabia Real Estate Market Review Q1 2024. This ascent is buoyed by the city's economic diversification and its closeness to major industrial zones, positioning it as a cost-effective choice for businesses.
  • Occupancy rates for office spaces in these cities remain robust. The Kingdom's average occupancy rate saw a 0.9 percentage point uptick, with an ADR rise of 6.7%, culminating in an 8.2% boost in RevPAR for 2024, as per the Saudi Arabia Real Estate Market Review Q2 2024. This resurgence signals a market rebound, with businesses, adapting to post-pandemic norms, gravitating towards modern workspaces that enhance collaboration and productivity. The tight supply of office spaces has further escalated rental prices, intensifying competition among tenants.
  • Saudi Arabia's office sector has seen a performance uptick, driven by government initiatives attracting a wave of international firms. A significant chunk of this demand is from government entities, aligning with the Vision 2030 objectives. With the government steadfast in its Vision 2030 pursuits, investors can anticipate a consistent demand for commercial real estate in the nation's major cities, particularly in the increasingly commercialized Riyadh and Jeddah, where rental yields are among the nation's highest.

Saudi Arabia Office Real Estate Industry Segmentation

Office real estate is the construction of buildings for leasing and selling purposes to companies from different sectors. A complete background analysis of the Saudi Arabia office real estate market, including the assessment of the economy and contribution of sectors in the economy, market overview, market size estimation for key segments, emerging trends in the market segments, market dynamics, and geographical trends, are covered in the report.

The Saudi Arabia office real estate market is segmented by major cities (Riyadh, Jeddah, and Makkah). The report offers market size and forecasts in value (USD) for all the above segments.

By Key Cities
Riyadh
Jeddah
Makkah
Other Cities
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Saudi Arabia Office Real Estate Market Size Summary

The Saudi Arabia office real estate market is experiencing significant growth, driven by government initiatives such as Vision 2030, which aim to diversify the economy and attract foreign investment. The demand for commercial and retail spaces, particularly Grade-A offices, has surged post-pandemic, with increasing occupancy rates and rising rental prices. Riyadh, as the capital and commercial hub, is at the forefront of this growth, benefiting from the relocation of international companies and the Regional Headquarters Program. The market is characterized by a strong demand for office spaces with enhanced facilities and flexible layouts, catering to a diverse range of tenant needs. Despite challenges such as limited availability, the market remains robust, with Jeddah, Dammam, and Khobar also witnessing increased demand.

The real estate sector in Saudi Arabia is poised for further expansion, supported by substantial investments in infrastructure and economic projects like NEOM. The government's focus on diversifying income sources away from oil has led to increased activity in sectors such as esports and video gaming, further boosting the real estate market. The retail sector is also showing signs of recovery, with strategies to integrate retail with entertainment and other complementary components to enhance foot traffic. The market is fragmented, with numerous local and regional players, alongside international consultancy firms, actively participating in the development of Grade-A office spaces. As the Kingdom continues to implement its ambitious plans, the office real estate market is expected to see sustained growth, attracting both local and international investors.

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Saudi Arabia Office Real Estate Market Size - Table of Contents

  1. 1. MARKET INSIGHTS AND DYNAMICS

    1. 1.1 Current Market Scenario

    2. 1.2 Market Overview

    3. 1.3 Market Dynamics

      1. 1.3.1 Drivers

        1. 1.3.1.1 Vision 2030

        2. 1.3.1.2 Urbanization

      2. 1.3.2 Restraints

        1. 1.3.2.1 Global Economic Uncertainity

        2. 1.3.2.2 Regulatory Hurdles

      3. 1.3.3 Opportunities

        1. 1.3.3.1 Foreign Direct Investment

        2. 1.3.3.2 Tech Hub Development

    4. 1.4 Porter's Five Forces Analysis

      1. 1.4.1 Threat of New Entrants

      2. 1.4.2 Bargaining Power of Buyers/Consumers

      3. 1.4.3 Bargaining Power of Suppliers

      4. 1.4.4 Threat of Substitute Products

      5. 1.4.5 Intensity of Competitive Rivalry

    5. 1.5 Value Chain / Supply Chain Analysis

    6. 1.6 Commercial Real Estate Buying Trends - Socio-economic and Demographic Insights

    7. 1.7 Government Initiatives and Regulatory Aspects for Commercial Real Estate Sector

    8. 1.8 Insights into Existing and Upcoming Projects

    9. 1.9 Insights into Interest Rate Regime for General Economy and Real Estate Lending

    10. 1.10 Insights into Rental Yields in the Commercial Real Estate Segment

    11. 1.11 Insights into Capital Market Penetration and REIT Presence in Commercial Real Estate

    12. 1.12 Insights into Public-private Partnerships in Commercial Real Estate

    13. 1.13 Insights into Real Estate Tech and Startups Active in the Real Estate Segment (Broking, Social Media, Facility Management, and Property Management)

    14. 1.14 Impact of the Geopolitics and Pandemic on the Market

  2. 2. MARKET SEGMENTATION

    1. 2.1 By Key Cities

      1. 2.1.1 Riyadh

      2. 2.1.2 Jeddah

      3. 2.1.3 Makkah

      4. 2.1.4 Other Cities

Saudi Arabia Office Real Estate Market Size FAQs

The Saudi Arabia Office Real Estate Market size is expected to reach USD 7.89 billion in 2024 and grow at a CAGR of 8.11% to reach USD 11.65 billion by 2029.

In 2024, the Saudi Arabia Office Real Estate Market size is expected to reach USD 7.89 billion.

Saudi Arabia Office Real Estate Market Report Snapshots

SAUDI ARABIA OFFICE REAL ESTATE MARKET Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)