Grade A rents in Riyadh rose 23% y-o-y to a record SAR 2.7k per sqm in 1Q 2025, while Grade B rents rose 24% exceeding SAR 1.5k per sqm, according to Knight Frank’s Spring 2025 Saudi Arabia Commercial Market Overview (pdf).

The breakdown: Prices of Grade A in Jeddah increased 4% y-o-y to SAR 1.3k per sqm, while those in Grade B grew 6% y-o-y to SAR 845 per sqm. Grade A rents in Dammam Metropolitan Area remained stable at SAR 1k per sqm, while Grade B rents were up 6% y-o-y to SAR 845 per sqm.

Grade A occupancy is inching up: Occupancy rates in Riyadh’s Grade A offices reached 98% (up one percentage point) by the end of 1Q 2025. Meanwhile, occupancy was up by 2 percentage points y-o-y to 95% in Jeddah, and up 2 percentage points y-o-y to 87% in Dammam.

.. and Grade B too: Occupancy for Grade B offices in Riyadh were up 3 percentage points y-o-y to 97%. Jeddah’s occupancy was up 6 percentage points y-o-y to 95%, while the DMA remained unchanged at 72%.

The drivers: Demand for office space is being driven up by the Public Investment Fund (PIF) and subsidiary companies taking most of the available units, Amar Hussain, associate partner for research at Knight Frank MENA, told Semafor. “You have these entities coming in and locking entire floors at rates most companies can’t match,” Hussain said. This is coupled with the Regional Headquarters Program, which requires foreign firms to move their hubs to the Kingdom by 2026 to be eligible for government contracts.

LOOKING AHEAD- A total of 2.7 mn sqm of new office space is expected to be completed across the Kingdom in the next two years. Riyadh’s total office stock was 5.5 mn sqm at the end of 1Q 2025 and is projected to increase to 9.8 mn sqm by 2027. Jeddah’s office stock is forecasted to grow to 1.8 mn sqm by 2027 from 1.6 mn over the same period. The DMA is expected to reach 1.7 mn sqm of office space by 2027, up from 1.5 mn sqm as of 1Q 2025.

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