Saudi Arabia's office market occupancy approaches capacity: CBRE

Saudi Arabia's office market continued to demonstrate exceptional strength, led by the surge of multinational activity through the Regional Headquarters program, according to CBRE Middle East, a global leader in commercial real estate. 

In its Q4 2025 report, CBRE Middle East said that Grade A occupancy in Riyadh is approaching capacity, reinforcing the emergence of a pre‑leasing culture as occupiers look to secure future space amidst acute supply constraints. 

Prime rents in districts such as the King Abdullah Financial District (KAFD) continue to hit new heights, supported by sustained demand and supported by ongoing transport integration, which is elevating the appeal of KAFD’s premium commercial spaces.

On the other hand, residential market performance reflected a period of healthy rebalancing. Increased delivery, particularly in Riyadh, which is set to welcome approximately 70,000 units over the next two years, has moderated price growth and pushed the market toward greater stability.
 
While transaction activity has softened as stakeholders assess the implications of the new foreign ownership framework, Jeddah remains a standout performer, recording rising volumes.
 
Looking ahead, the implementation of the new foreign ownership law in January 2026 is expected to be a major catalyst for activity within designated residential investment communities.

Retail continued its transformation into a more experiential, lifestyle‑driven sector.

Construction progress at super‑regional destinations. With mall rents stabilizing and point-of-sale (POS) data indicating strong performance in food and beverage (F&B), and e‑commerce channels, the sector is evolving into a diversified ecosystem that supports both physical and online consumption.

The hospitality market navigated a softer performance cycle as new supply impacted occupancy levels, yet the broader tourism ecosystem maintained strength.
 
On industrial & logistics, the sector remained in strong demand, supported by rapid e‑commerce growth, smart logistics partnerships and a national logistics strategy attracting substantial private investment.

Industrial rents continued their upward trajectory across Riyadh and Jeddah, while major new agreements, such as the planned development of 2 million square metres of smart logistics assets in the Golden Triangle, are positioning the sector for sustained expansion.