Knight Frank sees higher demand for offices, hotels in Saudi Arabia

Riyadh city

Knight Frank stated that government initiatives — particularly the Regional Headquarters Program — are driving increased demand for office space in Saudi Arabia, especially in Riyadh.

Around 600 companies announced plans to establish their regional headquarters in the city, significantly boosting demand for prime office space and reshaping the quality of services and amenities offered in the market.

In its latest report on Saudi Arabia, the firm noted that office vacancy rates in Riyadh remain low. "Grade A" office rents surged by 23% year-on-year (YoY) in Q1 2025, reaching a record high of SAR 2,700 per square meter. "Grade B" office rents also climbed 24% YoY over the same period, as a shortage of premium space led companies to seek alternatives.

Knight Frank expects some improvement over the next two years, with approximately 2.7 million square meters of new office spaces projected to be delivered across the Kingdom.

The report also highlighted strong occupancy levels in Jeddah, where office rents continue to rise steadily. This trend is supported by growing demand and sustained investment from leading private sector firms. "Grade A" office rents in Jeddah rose by 4%, while "Grade B" rents increased by 6% during the same period.