Riyadh’s Office Market Thrives Amid Economic Diversification and Global Business Appeal
Riyadh’s office market continued its upward trajectory in 2024, supported by Saudi Arabia’s ongoing economic diversification and strong demand for space from multinational companies. Savills latest research highlights key trends shaping the market, including record occupancy rates and a surge in international interest.
Riyadh’s resilience is underpinned by Saudi Arabia’s non-oil sector expansion, which grew by 4.5% in 2024 and is projected to rise by 5.8% in 2025. Strategic initiatives under Vision 2030, regulatory enhancements, and competitive tax incentives have cemented Riyadh’s position as a business-friendly city. Foreign direct investment (FDI) inflows reached SAR 16 billion in Q3 2024, while the Purchasing Managers’ Index (PMI) in November recorded its 50th consecutive month of readings above 50 signalling expansion – it came in at 59, underpinned by robust domestic demand and favourable policies.
By mid-2024, the Saudi Ministry of Finance announced that 517 multinational companies had established regional headquarters in Riyadh, exceeding the Vision 2030 target six years ahead of schedule. New entrants in Q4 included PMG, Snowflake, and CRU, reinforcing Riyadh’s growing status as a global business hub.
Ramzi Darwish, Head of Savills Saudi Arabia, commented: “Riyadh has firmly established itself as a key destination for global businesses looking to expand in the region. The combination of a proactive government approach, strategic investments, and a strong non-oil economy has created a vibrant and dynamic office market. With rising demand for Grade A spaces and new developments on the horizon, Riyadh is well-positioned to continue its impressive growth trajectory.”
Savills reported a surge in inquiries during Q4, with nearly half originating from US and UK companies. Demand was focused on flexible office spaces under 1,000 sqm, reflecting an increasing preference for adaptable workplace solutions. The Technology, Media, and Telecommunications (TMT) sector dominated leasing activity in Q4, contributing 37.5% of completed transactions. Other active industries included Banking, Financial Services, and Insurance (BFSI), Consulting and Legal Services, and IT/ IT Enabled Services. Notably, 62.5% of transactions involved businesses entering the Riyadh market for the first time.
Grade A occupancy rates reached an impressive 98% in Q4 2024, driven by a shortage of prime office spaces and sustained business confidence. Rental rates continued to climb with year-on-year growth of 10%. Zones A, which contains developments such as Business Lane Project, Nawafeth, and Zone B, home to Riyadh Business Gate and Granada Business Park, saw even sharper increases of 21% and 14%, respectively.
Over 550,000 sqm of new Grade A office space is expected to be delivered by the end of 2025, with flagship developments such as Diriyah Gate and Prince Mohammed Bin Salman Nonprofit City set to broaden tenant options. While this increase in supply may moderate rental price growth, demand for high-quality, ESG-compliant spaces is expected to remain strong, reflecting the priorities of businesses seeking sustainable and premium workplaces.
