According to a Knight Frank report, high demand for Grade A office space in Riyadh has resulted in occupancy rates as high as 98%.
Faisal Durrani, Head of Middle East Research, at Knight Frank, explained: “As the Kingdom’s economic transformation plan unfolds, business activity is rising at an extraordinary pace. 70 firms have now committed to relocating their regional headquarters to Riyadh.”
“The number of foreign investment licenses issued during Q2 was nearly 700% up on last year, led by retail, construction, manufacturing, hotels, and F&B and business services companies, all of whom are contributing to the record level of office requirements we are recording.
“70 firms have now committed to relocating their regional headquarters to Riyadh”
“Separately, FDI levels hit SAR 3.5 billion during Q2, across 49 deals, up from 37 in Q1, which alone has created 2,000 new jobs which will inevitably filter through to the office market in the form of new space requirements”.
Because of the tremendous demand, landlords and office owners are in a strong position. Grade A office rents stand at around SAR 1,065 per square meter, an 6.5% increase from this time last year. Grade B rents have increased by 8.5% over the same period.
“The number of foreign investment licenses issued during Q2 was nearly 700% up on last year”
Saudi Arabia is experiencing a similar issue across the entire country, with Jeddah and the Eastern Province reporting considerable demand for Grade A office space.