Riyadh Office Market Sees Rental Growth Stabilise as Demand Remains Steady
The office real estate market in Riyadh is entering a more balanced growth phase, with rental increases moderating while occupier demand remains steady, according to the latest Q1 2026 report by Savills.
Stable Demand Supports High Occupancy
Despite regional geopolitical pressures, including disruptions to oil flows through the Strait of Hormuz, Saudi Arabia’s non-oil economy continues to expand, underpinning business activity in the capital. Real GDP growth is projected at 2.6% in 2026, with the non-oil sector expected to grow by 3.6%, reinforcing the Kingdom’s diversification strategy.
Demand for office space remained consistent in Q1, with Grade A occupancy levels holding at 98.5%, indicating sustained pressure on prime office supply. Key sectors driving leasing activity include banking, financial services, engineering, manufacturing, technology, media, telecommunications, and pharmaceuticals.
Notably, smaller office units under 1,000 sq m dominated enquiries, reflecting a growing preference for flexible and efficient workspaces.
Rental Growth Moderates Across Key Zones
While demand remains strong, rental growth has begun to stabilise, rising 1% quarter-on-quarter and 6% year-on-year. Prime office rents reached:
- SAR 2,896 per sq m in Zone A (central Olaya/KAFD corridor)
- SAR 2,457 per sq m in Zone C (southern district)
This more measured growth trend is partly attributed to Riyadh’s five-year rent stabilisation policy, alongside softer external economic conditions.
According to Ramzi Darwish, the market is becoming increasingly mature and balanced, with occupiers focusing more on quality, location, and long-term value rather than rapid expansion.
Multinational Interest Remains Strong
Riyadh continues to strengthen its position as a regional business hub, attracting a growing number of global firms. As of early 2026, over 700 multinational companies have established regional headquarters in the city—surpassing Saudi Vision 2030 targets ahead of schedule.
International demand remains robust, with 80% of leasing enquiries in Q1 coming from US-based companies, highlighting Riyadh’s increasing global appeal.
New Supply to Shape Future Market Dynamics
Looking ahead, the market is set to evolve further with the delivery of over 700,000 sq m of Grade A office space by late 2026. Key upcoming developments include:
- Diriyah Gate
- Prime Business Resort
- Prince Mohammed bin Salman Nonprofit City
While this additional supply will provide greater choice for occupiers, demand for well-located, high-quality office assets is expected to remain strong.
Outlook: A More Balanced Growth Phase
Overall, Riyadh’s office market is transitioning from rapid expansion to sustainable growth, supported by:
- Strong economic fundamentals
- Continued foreign investment
- Government-backed policy stability
As supply increases and rental growth stabilises, the market is expected to offer a more predictable and strategic environment for both investors and occupiers.
