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 spaces in Saudi Arabia, especially in Riyadh.

Around 600 global enterprises announced plans to establish their regional headquarters in the Saudi capital city, underpinning demand for prime office spaces and reshaping the quality of market services and amenities, the research firm said in its latest report.

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 (sqm).

Lease rates for Grade B offices also climbed 24% YoY over the same period, as a shortage of premium office spaces led companies to seek alternatives, it further stated.

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

The report also highlighted strong occupancy levels in Jeddah, with office rents maintaining a steady growth trajectory.

This trend is supported by growing demand and sustained investment from leading private sector firms. Grade A office rents in Jeddah rose by 4% for Q1 2025, while those of Grade B spaces increased by 6% during the same period.