Office rental in Riyadh record a 18% increase in 2024

Office rental in the Saudi capital, Riyadh, was a 18%increase by the end of last year, powered by a strong demand with the lack of spaces available, according to the latest report on the real estate market in the Kingdom issued by CBE Middle East. Jeddah and Dammam also recorded an increase in rents, although at a rate of less than the capital, as the report indicates the growth of rent in them by about 10% and 12% respectively, explaining that the large and limited demand for the owners is played to maximize the value of the contracts. According to Matthew Green, head of the research department in the Middle East and North Africa in (Cbre), the strong demand for office spaces continues in light of the interest of international enterprises in establishing their local headquarters in the Saudi capital, and in light of the attraction of the economy for international investors, which is a basic pillar, Strategy is to get the economy within the “Vision 2030,”. In February 2021, the Kingdom announced that at the end of 2023, no government contracts would grant any company whose local headquarters outside Saudi Arabia, including contracts with government bodies, institutions and funds. It also announced tax incentives for companies taking local headquarters in the kingdom, which includes a 30 -year revenue exemption. According to the data, the number of multinational companies that have obtained licenses to establish local headquarters in Riyadh exceeded 570 companies, exceeding the target of the program to attract local headquarters by announcing their headquarters in the Middle East to Saudi Arabia: “Airbus”, “Oracle”. “Boeing”, “Samsung” and “Amazon” and “Goldman Sachs”. The housing sector increased the total value of mortgage loans in Saudi Arabia by 17% in 2024, indicating the increasing demand for dwelling units, especially in the cities of Riyadh, Jeddah and Dammam, according to (Cbre), which indicated that this high demand was reflected in the growth of prices and rents during the past year. The real estate analysis company expects the continued growth of demand for the residential property market during the coming years, driven by a strong economic base, rapid population growth and positive demographic factors in the kingdom, leading to an upward tendency of prices and rental values. The performance of the retail sector of the retail sector reflects the strong economic foundations of the kingdom, according to the report, which indicated the growth of the sector over the past year, compared to 2023, driven by the food and beverage sector, despite the slowdown to 7% in 2024, compared to the growth of 14% in the previous year. The report noted that the completion of the establishment of several new commercial centers could play in the coming years for the benefit of the tenants, to change the current situation controlled by the lack of offer with high occupancy figures and rental growth. The hospitality sector despite the large number of visitors received by the country in 2024, the increase in offer led to a minor drop in occupancy rates in December on an annual basis, but the average rate of daily rental prices rose 2.1% in the same period to relative stability in income for each available room, according to the report. Cbre expects increasing competition between hotels during the coming period, especially in Jeddah and Mecca, where a large number of new hotel rooms are expected to open during the next 12 to 24 months. Saudi Tourism Minister Ahmed Al -khatib said the Kingdom received 30 million tourists from abroad in 2024, higher than about 27 million for the previous year, to increase the percentage of the sector’s contribution to GDP to 5%, on the way to the 10% target. 150 million tourists annually. The report indicated that these ambitious numbers were supported by the state with the investment initiatives it introduced and the sporting events offered, led by the FIFA World Cup in 2034.