Performance in Saudi Arabia’s real estate sector remains fragmented, says CBRE

Performance in Saudi Arabia’s real estate sector remains fragmented, says CBRE

Riyadh – Fragmented performance and activity levels in Saudi Arabia’s real estate sector continued into the second quarter of the year across the Kingdom’s regions.

Looking at Saudi Arabia’s office sector figures, visitation to the workplace remains above its pre-pandemic baseline and now sits 19.3% above the baseline. Activity remains centered towards Riyadh, where demand continues to significantly outstrip supply. As a result, occupancy levels in Riyadh have risen over the last quarter by 0.7 percentage points to reach 98.1% on average in Q2 2022. Constrained supply levels have also continued to support growth in rental rates, where in the year to Q2 2022, average Grade A and Grade B rents increased by 3.9% and 4.2% respectively. In Jeddah, with the Grade A segment of the market being landlord favoured, average rents Grade A rents have increased by 2.4% in the 12 months to June 2022. In the Eastern Province, Grade A rents in Dammam increased by 2.9% over the same period, whereas in Khobar, average Grade A rents remained stable.

Residential transaction volumes in Saudi Arabia fell by 19.9% in Q2 2022, compared to a year earlier, while the total value of transactions increased by 21.4%. During this period, the number