2025-07-23-莱坊-Saudi_Arabia_Commercial_Market_Overview_Spring_2025页_2mb

Saudi Arabia Commercial Market Summary (Spring 2025)

Saudi Arabia's commercial real estate market continues to grow, driven by robust economic activity, government initiatives under Vision 2030, and substantial public and private investment. The market is attracting global businesses and investors, positioning the Kingdom as a regional leader in various commercial sectors.

Office Market

• Key Hubs: Riyadh and Jeddah remain central, with Riyadh seeing increased demand due to its strategic importance and the Regional Headquarters Programme (RHQ), attracting over 650 companies planning to establish regional HQs there.
• Rental Growth: Grade A and B office rents in Riyadh saw significant year-on-year increases (23% for Grade A, 24% for Grade B in Q1 2025) due to low vacancy rates and strong demand.
• Supply & Size: High vacancy rates (98% for Grade A, 97% for Grade B in Riyadh) indicate strong demand and limited new supply. Despite increased supply plans, prime space remains sought after, favouring quality over quantity.
• Riyadh's Growth: By 2027, Riyadh's office stock is projected to reach 9.8 million sqm, up from 5.5 million sqm at the end of Q1 2025.

Hospitality Sector

• Strong Performance: The hospitality sector has seen growth in occupancy and RevPAR, particularly around Holy Cities (Makkah, Madinah), bolstered by increased pilgrim traffic.
• Challenges in DMA: Jeddah experienced performance softening in early 2025 due to prioritization of leisure venues during seasonal breaks, but recovery is expected as events migrate towards Riyadh.
• Pipeline & Future: Increased supply projects are primarily focused on the high-end market, aligning with demand trends.

Data Centre Market

• Growth Trajectory: The Kingdom is rapidly developing its data centre infrastructure, projected to grow at a CAGR of 10.1% from US$1.78bn in 2023 to US$3.2bn by 2029.
• Strategic Push: Government support via SEZs, free zones, and the US$40bn Humain AI initiative (jointly launched by PIF) aims to position the Kingdom as a regional and global hub for AI and digital infrastructure.
• Capacity: Dammam leads in data centre development, with Saudi Arabia leveraging its strategic location via subsea cables and advancing cloud services from major providers.

Government Initiatives

• Vision 2030: Central to market growth, driving privatisation, foreign investment relaxation, and massive digital infrastructure projects (NEOM, Qiddiya, Diriyah Gate).
• Giga-Projects: Significant government investment supports the commercial centre transition, focusing on major transformations.
• Tourism Goals: The Kingdom aims to attract 70 million international tourists by 2030, reinforcing its appeal as a travel destination.

Overall Outlook

Saudi Arabia is undergoing a transformation to become a leading regional commercial centre. Office and hospitality markets are in high demand with limited supply, while the data centre market offers significant future potential underpinned by state-backed programmes and global interest. The momentum is expected to continue across all sectors due to supportive policies and increased capital flows.