Savills says that efforts to diversify will help the Riyadh office market grow in 2024
Riyadh’s office market continued to grow in 2024 because of Saudi Arabia’s efforts to diversify its economy and the high demand for office space from multinational companies, according to a new report from Savills released on Thursday.
Office Market
Savills noticed a big rise in inquiries during the fourth quarter of 2024, with almost half coming from companies in the US and the UK.
There was a growing demand for flexible office spaces, especially those under 1,000 square meters.
In the fourth quarter, the technology, media, and telecommunications (TMT) sector was the leader in office leases, making up 37.5% of all deals. Other major sectors included banking, financial services, insurance (BFSI), consulting, legal services, and IT services.
62.5% of the deals were by companies setting up in Riyadh for the first time.
Occupancy Rates
Grade A office space occupancy rates reached 98% in Q4 2024, driven by a limited supply of prime spaces and strong business confidence.
Over 550,000 square meters of new Grade A office space will be ready by the end of 2025, with major projects like Diriyah Gate and Prince Mohammed Bin Salman Nonprofit City offering more options.
There is still strong demand for high-quality offices that meet ESG (Environmental, Social, Governance) standards, as businesses focus on sustainability and top-quality workspaces.
Surprising Fact
Rental rates continued to rise, increasing by 10% compared to the previous year. Zone A (including developments like Business Lane and Nawafeth) saw a 21% increase, while Zone B (including Riyadh Business Gate and Granada Business Park) had a 14% rise.
Big Number
By mid-2024, Saudi Arabia reported that 517 multinational companies had set up regional headquarters in Riyadh, beating the Vision 2030 target by six years.
Resilient Economy
Riyadh’s role as a business hub has been strengthened by Vision 2030 initiatives, improved regulations, and tax incentives.
Riyadh’s economy is supported by Saudi Arabia’s growing non-oil sector, which grew by 4.5% in 2024 and is expected to grow by 5.8% in 2025.
Foreign direct investment (FDI) reached $4.3 billion in Q3 2024. The Purchasing Managers’ Index (PMI) stayed above 50 for the 50th month in a row, reaching 59 in November, showing strong local demand.
In February, Fitch Ratings confirmed Saudi Arabia’s A+ credit rating with a stable outlook, citing the country’s strong finances.
Published: 7th February 2025
Also Read:
IMF ready to assist in rebuilding Syria and Lebanon
Oil Goes Up After Saudi Increases Prices for March Delivery
ADNOC Gas’ profit rose 13% in 2024 to $5B, boosted by demand
