Office rents in Saudi Arabia surge due to influx of new foreign companies

Office rents in Saudi Arabia surge due to influx of new foreign companies

Office rents in Saudi Arabia’s major markets have surged on the back of strong demand resulting from the influx of new foreign businesses. 

Leasing rates for premium space in Riyadh went up by approximately 24% in the third quarter of 2023, while other cities recorded increases ranging from 1% to more than 18%, according to a report released on Wednesday by CBRE. 

“Throughout the third quarter of 2023, the commercial real estate market in Saudi Arabia demonstrated high levels of demand for quality office space, notably in Riyadh,” said Taimur Khan, Head of Research – MENA at CBRE in Dubai. 

The real estate consultancy said that demand is particularly high within the premium segment, where upcoming quality supply is “continually being leased before entering the market”. 

“This uptick in demand is resulting from the influx of new international companies, driven mainly by ‘Program HQ’, paired with increased requirements from emerging domestic entities,” Khan said. 

“For the remainder of the year, we anticipate performance levels to remain strong due to the quality supply shortage in the market, as additional entities look to set up in the kingdom.” 

Saudi’s “Program HQ” initiative aims to attract international businesses to set up their regional