Unprecedented demand for prime office spaces in Riyadh has taken Grade A office occupancy levels to 98%, according to the latest analysis by global real estate consultancy, Knight Frank.
“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 HQ’s to Riyadh,” it added.
Knight Frank also showed that Grade A office rents stand at around SAR 1,065 per square meter, reflecting a 6.5% increase on this time last year.
It added that, with limited Grade A options, many are either turning to the Grade B market, while others are exploring build-to-suit options. Grade B rents rose by 8.5% over the same period, while average Grade B rents went up 10% last year. Grade B occupancy levels now stand at 75%, the highest level in at least five years.
Meanwhile, Jeddah’s office market has also been experiencing a resurgence in requirements as multinational and domestic businesses ramp up their presence in Saudi Arabia’s second largest city. As is the case elsewhere in the world, the focus is on best-in-class Grade A offices. However, lack of supply and rising costs mean many businesses are exploring Grade B space as well, Knight Frank added.