Riyadh Prime Office Rents Rise as Demand from Global Firms Keeps Market Tight

Prime office rents in Riyadh increased by 3 per cent during the second quarter of 2026 as demand from multinational companies continued to outpace available supply, keeping Grade A office occupancy close to full capacity, according to a new report by CBRE.

The property consultancy said Riyadh’s office sector remained the strongest-performing segment of Saudi Arabia’s real estate market, supported by the Kingdom’s ongoing economic transformation and the expansion of businesses under Vision 2030.

Prime office rents reached SR3,320 ($886.72) per square metre during the quarter. CBRE said corporate tenants continued to compete for high-quality office space in the capital’s central business districts, where premium properties remain in short supply.

The report noted that the demand for Grade A offices has been driven in part by the Regional Headquarters (RHQ) programme, which encourages multinational companies to establish regional operations in Saudi Arabia. More than 780 international companies are now understood to hold licences under the initiative.

CBRE said Riyadh’s total office stock has exceeded 6 million square metres of gross leasable area, with about one-third classified as Grade A space. Around 600,000 square metres of additional office space is expected to be completed during 2026, including approximately 200,000 square metres of Grade A offices.

During the second quarter, the completion of the SR1 billion Boulevard Business Park added 60,000 square metres of Grade A office space to the market. Even with new supply, Grade A occupancy remained high, while average rents in the wider premium office segment rose 1 per cent year on year to SR2,570 per square metre.

The office market’s strength comes as Saudi Arabia continues to accelerate major development projects. The Al Rajhi Capital Saudi Construction Index climbed to a record 56.3 in June, while figures from the Saudi Contractors Authority showed project awards exceeded SR29.5 billion during the month. Government spending also increased 20 per cent compared with a year earlier, according to the Ministry of Finance, supporting investment across key infrastructure and development projects. The International Monetary Fund expects Saudi Arabia’s gross domestic product to grow by 1.7 per cent in 2026.

Outside the office sector, residential property activity weakened during the quarter. Nationwide residential transaction values fell 26.9 per cent year on year to SR37.67 billion, while the total number of transactions declined by 14.2 per cent.

Property prices showed mixed performance. Land values increased by 6.3 per cent and apartment prices edged up 1.1 per cent. Villa prices fell 9.7 per cent as buyers increasingly opted for smaller and more affordable homes. To support home ownership, the Real Estate Development Fund introduced its Alternative Financing Program, offering subsidised monthly instalments for first-time Saudi buyers.

CBRE said the retail market continued to benefit from resilient spending on food, beverages and entertainment, supported by Seven’s SR50 billion nationwide entertainment programme. Meanwhile, the hospitality sector faced softer demand as regional tensions and slower government spending on large-scale projects affected business travel and meetings. Domestic tourism remained an important source of demand, with spending reaching SR34.7 billion during the first quarter of 2026.

Industrial and logistics properties also continued to perform strongly, with limited availability of Grade A facilities supporting rental growth across major trade hubs, including Riyadh East and Jeddah South. CBRE said demand for premium office and logistics assets continues to underpin the broader Saudi property market despite slower activity in residential real estate and hospitality.