Fragmented performance across Saudi Arabia’s real estate sector in Q1, 2022 – The Peninsula

Fragmented performance across Saudi Arabia’s real estate sector in Q1, 2022 – The Peninsula

Saudi Arabia’s real estate sector has started the year with fragmented performance and activity levels across the Kingdom’s regions.

Looking at Saudi Arabia’s office sector figures, visitation to the workplace has since late September 2021 remained above its pre-pandemic baseline and now sits 19.7 percent above the baseline, with the majority of occupier activity continuing to be very much skewed towards Riyadh. As a result, we have seen average rents in Riyadh’s Grade A segment increase by 8.6 percent and Grade B rents by 6.0 percent in Q1 2022. These market fundamentals also mean that landlords are seldom offering incentives.

In Jeddah, despite the lack of activity and with limited availability in the Grade A segment, Grade A rents rose by 10.8 percent in the first quarter, whereas Grade B rents continued to soften and fell by 4.3 percent. Grade A rents in Dammam and Khobar increased by 4.0 percent and 2.6 percent respectively, with Grade A rents in both locations now above their pre-pandemic levels.

Residential transaction volumes in Saudi Arabia fell by 23.4 percent in Q1 2022, compared to a year earlier, while the total value of transactions fell marginally by 1.9 percent. During this period, the number of transactions totaled