Saudi office market robust in Q3 as quality supply looms, says expert

Saudi office market robust in Q3 as quality supply looms, says expert

Saudi Arabia’s office market performance expanded in the thrid quarter of 2023 as quality supply loomed across the kingdom, according to a report by CBRE.

As of Q3 2023, Riyadh’s King Abdullah Financial District (KAFD) has recorded upwards of 60% of its office space as leased. For occupiable supply, this rate is substantially higher at 92.2%.

Landmark transactions within KAFD included the acquisition of around 22,000 sqm of office space by two major management consulting firms. Whilst demand remains very much centered towards Riyadh, we continue to see demand trickle into Jeddah and the Dammam Metropolitan Area (DMA).

In terms of upcoming quality supply in the next two years, key additions in Riyadh’s office market include 166,100 sq m in KAFD, 200,000 sq m in EZDI Park, 60,000 sq m in STC Square and over 60,000 sq m in phase two of Laysen Valley.

This drive for office space in Riyadh, particularly for quality space in the likes of KAFD, has driven prime rents to record growth rates of 23.6% in the year to Q3 2023, where rents currently stand at SAR2,617 per sq m.

Grade A rents grew by 12.9% over the same period, reaching an average of SAR1,900