Saudi Arabia’s real estate market ends 2022 with fragmented performance across cities and asset classes, says CBRE

Saudi Arabia’s real estate market ends 2022 with fragmented performance across cities and asset classes, says CBRE

Riyadh – Saudi Arabia’s real estate sectors have recorded fragmented performance across cities and asset classes over 2022.

Looking at Saudi Arabia’s office sector figures, occupier demand remained strong over the last quarter of 2022. This was particularly so in Riyadh, where stock levels remain anemic at best and many upcoming developments are mostly fully pre-leased. Grade A offices in Riyadh saw average rental rates increase by 5.8% year-on-year increase in Q4 2022, while Grade B rents rose by 1.5%. As for average occupancy rates, both Grades A and B stock saw occupancy levels improve slightly to 99.2% and 98.7% in 2022, marking annual increases of 0.8 and 1.9 percentage points respectively. In Jeddah, Grade A office rents increased by 7.4% in the 12 months to December 2022, whereas Grade B rents remained unchanged. Occupancy rates for both Grade A and Grade B office rose to reach 90.6% and 76.0%, up from 87.8% and 74.6% in 2021. In the Eastern Province, Dammam and Khobar’s office markets saw Grade A rents increase by 7.9% and 6.2% respectively over the year to Q4 2022, with Grade B rents remaining flat. Grade A occupancy levels in Dammam and Khobar at the end of 2022