Vision 2030 Drives Surging Demand for Offices for Rent in Riyadh
Vision 2030 Fuels Riyadh’s Office Real Estate
2024 was an impressive year for Riyadh, office real estate, navigating robust demand and limited supply. These growth patterns are expected to continue stably well into 2025 and beyond, primarily driven by initiatives supporting Vision 2030 and the country’s broader economic diversification goals.
Vision 2030, focusing on three key themes such as (1) vibrant society, (2) a thriving economy, and (3) an ambitious nation by the year 2030, is a significant catalyst for real estate development, attracting both domestic and international capital.
Experts believe the Kingdom is poised to undergo massive transformations and create unique opportunities, fueled by its ambitious development agenda. This prediction comes despite the market facing challenges in navigating supply chain complexities and rising construction costs.
The non-oil sectors in Saudi Arabia are forecasted to grow by 5.8% in 2025, up from 4.5% in 2024, primarily due to investments in infrastructure and increased private sector participation.
The race for quality, limited vacancies in prime assets, and highly ambitious tourism strategies are other key factors driving sustained demand across the real estate sector, particularly in Riyadh and Jeddah. These market dynamics are creating a compelling long-term investment landscape.
Offices for Rent in Riyadh Face a Surge in Average Prices
The growing demand for office real estate in Riyadh, combined with the momentum of Vision 2030 initiatives, is contributing to a tightening supply. This imbalance is driving up rental prices, with average office rents rising by 18% year-on-year in the fourth quarter of 2024, according to recent analysis.
The upward price shifts for premium and executive grade workspaces solutions and office for rent in Riyadh signify the city’s expanding economic activity, driven by:
A thriving private sector
Ongoing government initiatives aimed at positioning the capital as a global business and investment hub.
The rise in the average price of offices for rent in Riyadh also underscores the progress the Kingdom is making in growing its real estate market, which is expected to reach a market value of $101.62 billion by 2029, with an anticipated compound annual growth rate of 8% from 2024.
Higher rentals for office spaces in Riyadh are complemented by high occupancy rates, further reflecting the strong demand, driven by Saudi Arabia’s growing economy aimed at diversification through Vision 2030.
Saudi Arabia’s RHQ Program Boosts Riyadh’s Real Estate
The Regional Headquarters (RHQ) program, introduced in 2021, was a key initiative of Vision 2030, which mandated foreign companies to establish their headquarters in Saudi Arabia.
The primary goal of the RHQ programme was to attract MNCs to establish their regional headquarters in Saudi Arabia, specifically in Riyadh, as a strategic way to enhance economic diversification and reduce the country’s dependence on the oil sector.
This has led to higher demand for Grade A offices for rent in Riyadh, Dammam, and Jeddah. This is another reason why, despite the rapidly rising average cost of office rentals in Riyadh, global occupiers and investors remain attracted to the city.
As of January 2025, there are, on average, 571 international companies that have opened Middle East bases in the Kingdom. This exceeds the original target of the HQ programme, 500 firms, by 2030.
The regional headquarters programme offers numerous benefits for multinational companies, including a 30-year exemption from corporate income taxes and withholding tax on headquarters’ activities, as well as other discounts and support services.
Saudi Arabia’s real estate market growth, particularly the demand for office spaces in Riyadh, continues to benefit from the country’s strong diversification strategies and highly successful RHQ programme. These outcomes are driving growth not only in the commercial real estate market but also across residential property, hospitality, and tourism sectors.
Grade-A Offices for Rent in Riyadh: Record Low Vacancy from 2024 to 2025
The limited supply to meet the high demand for office spaces in 2024 resulted in Grade A offices for rent in Riyadh and other active business hubs registering a mere 0.2% vacancy rate. It also pushed average rents to reach $609 per square meter in Q4 2024.
There are 326,600 sq m of Gross Leasable Area (GLA) added to the market to match the rapidly rising demand. On the other hand, a substantial 888,600 sq m of upcoming office space suggests even more expansion of the office real estate market to meet the rapidly rising demands in 2025.
Jeddah is also emerging as an attractive alternative for both regional and international companies due to its modern and high-quality office spaces in the northwestern part of the region. At the same time, Dammam’s office real estate market remains stable and is primarily driven by government entities in 2024.
Navigating the Growth in Riyadh’s Office Real Estate
Capacity constraints, resign costs, and geopolitical conflicts are some key challenges faced by Saudi Arabia's real estate sector.
The government of the Kingdom is addressing these challenges by increasing localisation efforts, ongoing infrastructure development, and major digital transformations.
Besides this, improved stakeholder collaborations, focus on renewable energy, initiatives to enhance sustainability, and regulatory reforms, where necessary, are key strategies that can help the country overcome these roadblocks.