Prime office space in Saudi Arabia's Riyadh is now 98 pct occupied: Report

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Occupancy levels for prime office space in Saudi Arabia’s capital city Riyadh have reached 98 percent, according to real estate consultancy Knight Frank.

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Grade A office space, characterized by its sought-after location and high-quality infrastructure, is 98 percent occupied, while Grade B office space is 75 percent occupied – the highest level in five years.

Average rent for prime office space has also risen by 18 percent in the last 12 months to reach $472 (1,775 riyals) per square meter.

Jeddah’s rental market is also on the up, with average rent for Grade A office space increasing by 6.5 percent over the last year to reach $283 (1,065) per square meter.

Grade A offices in Saudi Arabia’s second city are now 92 percent occupied, while Grade B occupancy stands at 80 percent.

Positive economic sentiment has also reached the Kingdom’s Eastern Province.

Rent for Grade A space in Dammam has risen by five percent in the last 12 months to reach $253 (950 riyals) per square meter.

Grade A occupancy in the city has reached 77 percent, up from 73 percent last year.

“As the Kingdom’s economic transformation plan unfolds, business activity is rising at an extraordinary pace,” Faisal Durrani, Head of Middle East Research at Knight Frank, said in a statement.

Durrani noted that 70 firms have now committed to relocating their regional headquarters to Riyadh, including Aldeham Education Group (AEG) and French rolling stock manufacturer Alstom.

The number of foreign investment licenses issued during the second half of 2022 was up by nearly 700 percent on the previous year, led by retail, construction, manufacturing, hotels, food and beverage, and business services companies, Durrani added.

“Separately, foreign direct investment (FDI) levels hit $931.2 million (3.5 billion riyals) during Q2, across 49 deals, up from 37 in Q1, which alone has created 2,000 new jobs which will inevitably filter through to the office market in the form of new space requirements,” Durrani said.

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