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RIYADH: ��������’s commercial real estate sector is witnessing exponential growth, with rents for Grade A office spaces in the Kingdom’s capital reaching SR2,700 ($719.95) per sq. meter by the end of March, an analysis showed. 

In its latest report, global real estate consultancy Knight Frank said average rents for office spaces in Riyadh witnessed an annual rise of 23 percent by the end of the first quarter, driven by the success of government-led initiatives, including the ambitious regional headquarters program.

Strengthening the real estate sector is one of the key goals outlined in ��������’s Vision 2030 agenda, as the nation aims to position itself as a leading business and tourism destination by the end of the decade. 

The Kingdom’s Real Estate General Authority expects the property market to reach $101.62 billion by 2029, with an anticipated compound annual growth rate of 8 percent from 2024.

“��������’s economic momentum continued to strengthen across key sectors in 2024, underpinned by rising private sector activity,” said Faisal Durrani, partner — head of research for the Middle East and North Africa at Knight Frank. 

According to the report, the Kingdom’s Grade A office rents witnessed an occupancy level of 98 percent by the end of March. 

Grade B rents grew by 24 percent year on year by the end of the first quarter, while the occupancy level of these spaces stood at 97 percent. 

Grade A office spaces command higher rents than the area average, thanks to their prime locations, modern infrastructure, and newer construction.

In contrast, Grade B office spaces are more affordable, offering a lower-cost alternative to Grade A units.

The report further said that around 600 companies have announced plans to establish their regional headquarters by the end of February, significantly boosting demand for prime office spaces. 

��������’s regional headquarters program offers benefits to international firms, including a 30-year exemption from corporate income tax and withholding tax on headquarters activities, as well as discounts and support services. 

“A total of 14,303 foreign business investment licenses were issued during 2024, a 67 percent increase from 2023, marking the highest annual figure on record and underscoring the sustained appeal of �������� to global corporates and investors,” said Durrani. 

The analysis added that Jeddah is also experiencing significant growth in the commercial real estate sector, with both Grade A and Grade B occupancies reaching 95 percent by the end of March. 

Knight Frank said Grade A office rents in Jeddah reached SR1,280 per sq. meter, marking a 4 percent year-on-year growth, while Grade B office rents grew by 6 percent to reach SR845 per sq. meter. 

Jeddah’s total office stock is expected to rise from 1.6 million sq. meters this year to 1.8 million sq. meters by 2027.

“As more companies expand their footprint across ��������, Jeddah is attracting a growing number of regional and local firms. This rising interest is being supported by a healthy office development pipeline,” said James Hodgetts, partner — occupier strategy and solutions at Knight Frank.

He added: “Upcoming projects include Jeddah Gate, which is expected to deliver 230,000 sq. meters between 2025 and 2028, and Jeddah Rose, a mixed-use development bringing 25,000 sq. meters of office space to the market by the end of 2025.” 

In May, Jeddah Municipality announced 29 new investment opportunities spanning over 1.4 million sq. meters, targeting sectors including commercial, industrial, residential, and recreational.

The package includes 13 commercial opportunities featuring the development and operation of retail shops and commercial complexes across various districts.

In April, a separate report released by credit rating agency S&P Global said that the Kingdom’s retail real estate market is poised for growth in the near term, driven by population growth, expanding tourism, and economic diversification efforts under the Vision 2030 initiative. 

S&P Global added that ongoing mega projects and the expansion of international brands are expected to propel further demand for retail space nationwide.

Hospitality overview

According to the study, the average daily rate in ��������’s hospitality sector increased by 10.8 percent year on year by the end of March, while revenue per available room increased by 12.3 percent during the same period. 

The report said the growth of the Kingdom’s hospitality sector was largely driven by gains in the nation’s holy cities and Riyadh. 

In the first quarter of 2025, ADR in Makkah rose by 28.9 percent year on year to SR859, while RevPAR was up by 35.7 percent to SR673.

Citing data from the Ministry of Hajj, Knight Frank said the surge in performance in Makkah reflected heightened demand linked to the rise in issued Umrah visas, which grew by 8.3 percent. 

With more than 8,500 rooms under construction across 12 hotel developments, Makkah’s total inventory is set to increase from 63,428 to 71,643 rooms by 2027, the report added. 

According to the analysis, ADR in Madinah reached SR891 by the end of the first quarter, representing an 11.8 percent year-on-year rise, while RevPAR rose by 15.1 percent to SR724. 

Madinah currently has 20,673 hotel rooms, and an additional 2,100 keys are expected to be delivered by 2027. Major international operators continue to expand their presence, including Hilton and Marriott, with planned openings totaling over 6,000 rooms.

Rua Al-Madinah, a new giga-project situated east of the Prophet’s Mosque, is also poised to reshape the hospitality landscape, with over 47,000 planned hotel rooms. 

“These latest figures point to resilient demand amid limited new supply and further highlight Madinah’s pricing strength,” said Amar Hussain, associate partner — research, Middle East at Knight Frank. 

He added: “Pilgrim arrivals in the city are expected to reach 30 million by 2030, up from 17.3 million in 2025, reflecting the city’s growing role as a global hub for religious tourism.” 

Data Centers

Knight Frank said �������� is positioning itself as the Middle East’s leading data hub, with plans to grow its data center market from $1.78 billion in 2023 to $3.2 billion by 2029, representing a compound annual growth rate of 10.1 percent.

The report noted that ��������’s total IT capacity is expected to increase from around 250-300 megawatts in 2024 to more than 1,000-MW by 2030, driven by strategic government initiatives and substantial investment in digital infrastructure. 

During the LEAP 2025 conference in February, Cathy Mauzaize, US-based software firm ServiceNow’s president for Europe, the Middle East and Africa, said that the company is set to launch data centers in the Kingdom in 2026. 

In the same month, Alfanar Global Development also announced a $1.4 billion investment plan to develop four world-class data centers in ��������. 

Knight Frank added that all tier-one US cloud providers, including Microsoft, Amazon Web Services, Google Cloud, and Oracle, have either launched operations or announced further expansions in the Kingdom. 

Amazon Web Services alone has committed $5.3 billion to scale up its cloud services across key cities.

Chinese firms such as Alibaba Cloud and Huawei Cloud have also established a local presence.

“�������� is now the fastest growing market for data centers as the country continues its drive toward national digitalization,” said Stephen Beard, global head of data centers at Knight Frank. 

He added: “The Kingdom’s development of data center infrastructure has been driven largely by adoption of public cloud and sustained public and private investment, transforming it into one of the top five global AI superpowers — evident in the recent launch of the $100 billion Transcendence AI Initiative.” 

�������� launched Project Transcendence in November, a $100 billion AI initiative aimed at building data centers, supporting startups, and developing infrastructure. 

The initiative promises to bring together expertise, infrastructure, and innovation to position the Kingdom at the forefront of AI advancements.

JEDDAH: Syria is set to expand stock market trading to five days a week starting in July, part of a broader push to modernize its exchange and attract more investors, officials said. 

Finance Minister Mohammad Yasser Barnieh said the Damascus Securities Exchange will implement a development plan aimed at boosting market activity and listings, according to the official Syrian Arab News Agency.

Barnieh announced in a LinkedIn post that the exchange will hold a general assembly meeting in September to elect a new board of directors. 

The SANA report stated the minister explained that, in collaboration with the new board, the Capital Market Authority, and specialized experts, a comprehensive development plan will be launched. 

The report added: “This plan aims to expand the supply side of securities and create favorable conditions for the listing of more family-owned businesses, private universities, and other companies and institutions.” 

The minister also noted that the plan involves introducing new financial instruments and investment services aimed at stimulating market demand. 

The exchange resumed trading on June 2 after a six-month suspension, with the reopening attended by government officials and key players in the financial sector. 

In an earlier statement, Barnieh said the exchange would operate as a private company and become a key platform for Syria’s economic development with a focus on digital transformation. 

The planned reforms come as the country looks to revive its battered economy and rebuild investor confidence after years of conflict, sanctions, and financial isolation. 

The government is seeking to modernize capital markets as part of wider efforts to attract private investment and stimulate post-war reconstruction.