In the third quarter of 2024, the rents for Grade A office spaces in Riyadh increased 20.8% to SR2,131 (USD 567.31) per square meter, indicating a significant expansion of the Saudi capital’s real estate market. This growth has also become indicative of the city’s booming private sector, amid the continuous government efforts to establish the prosperous urban hub as a major international centre for investment and business.
Global real estate venture JLL’s most recent market analysis indicates that the increase in demand for premium office space is helping to drive vacancy rates to a record low of 1.6% in Q3 2024. The Kingdom’s efforts to diversify its economy under the ambitious “Vision 2030” agenda, especially the ongoing expansion of the private sector in Riyadh, have been credited by the report with driving up office rents.
While JLL found businesses and investors finding the city an appealing prospect, it also noted a high demand for Grade A office space in strategic areas. Additionally, Northern Riyadh is becoming more and more popular among occupiers due to its excellent accessibility and high-quality developments. This is because of the area’s effective workspaces and plenty of parking, which help to reduce the traffic congestion that is getting worse.
Grade A office rents in Jeddah increased by 11.6% annually to SR1,338 per square meter, with a low vacancy rate of 3.7%. These patterns show that the market is stronger overall in Saudi Arabia’s major cities.
The Kingdom’s growing tourism infrastructure and high-profile events drive the hospitality industry’s remarkable growth in Saudi Arabia. With the continued construction of urban infrastructure and the millions of tourists attracted by events like Riyadh Season and AlUla Season, the Kingdom firmly establishes itself as a top international destination for business and pleasure.
With 17.5 million foreign visitors in the first seven months of 2024 alone, Saudi Arabia’s leisure tourism industry has grown by 656% since 2019, according to the Ministry of Tourism.
Talking about the Kingdom’s real estate sector, The Trump Organization and luxury developer Dar Global plan to build two new luxury projects in Saudi Arabia. The developments will be based in Riyadh. The two ventures are working together on several projects in the Middle East. They are set to formally launch another Trump Tower in December in Jeddah, Saudi Arabia’s second largest city.
The partnership between the Trump family and Dar Global has deepened over the last decade, with Dar’s Chief Executive Officer Ziad El Chaar at the heart of the collaboration. The two firms are also working on developments in Oman and Dubai.
Saudi Arabia may be the newest lucrative opportunity for the Trump Organization as the Gulf nation rapidly builds luxury resorts and new homes as part of the “Vision 2030” agenda. Some USD 1.3 trillion in real estate and infrastructure projects have been announced across the Kingdom over the past eight years as part of those plans.
“These developments will redefine luxury living in Saudi Arabia’s capital and strengthen our presence in this high-growth market,” El Chaar said.