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Riyadh saw 5.9k transactions valued at SAR 7.8 bn in 2Q 2025, according to CBRE’s SaudiArabia Real Estate Market Review (pdf). The demand was spurred by the launch of Azure’s luxury Lamara project in Riyadh and a SAR 1.7 bn real estate investment fund to finance major projects in Riyadh and Jeddah. The projects are meant to bring Riyadh closer to an estimated 120k to 130k new residential units annually to meet demand.
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Riyadh’s prime offices are still crammed, maintaining over 95% occupancy rates in the second quarter, which has pushed average commercial rents up by approximately 4% q-o-q. There is a notable preference for Grade A office spaces, with about 70% of inquiries for smaller units under 1k sqm.
But we’ll be getting more space in the coming years: While only around 200k sqm of new office space is expected by the end of 2025, supply is projected to increase significantly in 2026 and 2027, with about 600k sqm expected each year. Jeddah’s office market is also strengthening, with Grade A occupancy at about 95%.
On the retail front: Rents for super-regional and regional malls saw a marginal 1% y-o-y increase, with occupancy rates averaging 90%. In Riyadh, approximately 100k sqm of new retail supply is expected by the end of 2025.
Our retail sector is undergoing “retailtainment,” where shopping centers evolve into comprehensive entertainment destinations. Saudi Entertainment Ventures (Seven) is leading the transformation, investing over SAR 35 bn in 14 entertainment projects across the country.
BUT- Concerns about potential oversupply in secondary locations and the growing preference for e-commerce still pose challenges.
The big boys: 2Q saw the launch of two large-scale mixed-use developments in Riyadh — the SAR 2 bn Osus Eye project and the SAR 12.1 bn “Saudi Silicon Valley” known as Pulse Wadi. The Dar Al Hijra urban development project in Madinah is also moving forward with a new master plan design contract.
