Riyadh's Office Market Thrives With Economic Reforms And Global Corporate Demand
Riyadh's office market showed resilience and steady growth in the third quarter of 2025. This was supported by Saudi Arabia's strong economic outlook and diversification efforts under Vision 2030, as detailed in the latest report from Savills Middle East.
Saudi Arabia's non-oil economy remains a significant growth driver. Oxford Economics predicts a 4.8% GDP growth in 2026, with the non-oil sector expanding by 5.2%. The country's Purchasing Managers Index (PMI) reached 57.8 in September, marking its 58th consecutive month above the neutral threshold of 50 points, indicating sustained business confidence and job creation across key sectors.
Foreign direct investment (FDI) continued to rise, increasing by nearly 25% in the first half of 2025 compared to the same period last year. In Q2 alone, FDI inflows reached SAR 22.8 billion, up from SAR 19.9 billion in Q2 2024, highlighting growing international interest and capital inflows into priority sectors.
Recent policy reforms are reshaping Riyadh's real estate landscape by enhancing transparency and promoting long-term stability. A five-year rent freeze has been implemented across residential and commercial sectors to maintain affordability while ensuring predictable conditions for investors.
Multinational Corporations and Leasing Activity
Riyadh continues to attract multinational corporations establishing regional headquarters in the capital. By September 2025, 660 multinational companies had secured licences, with new entrants like Lenovo and ORI Group joining in Q3. Savills reported that US and UK-based companies accounted for 60% of leasing enquiries during this period.
"Riyadh continues to consolidate its role as a major global business hub," said Ramzi Darwish, Head of Saudi Arabia at Savills Middle East. "Government-led reforms, coupled with sustained occupier demand and long-term rental stability, are fostering a highly attractive environment for both local and international investors."
Office Space Demand and Rental Trends
The banking, financial services, insurance (BFSI), and IT sectors led leasing activity during the quarter, accounting for 57.1% of total transactions. Consulting and pharmaceuticals each contributed 14%, with new market entries making up 43% of completed deals.
Demand for larger office spaces strengthened significantly, with 80% of enquiries in Q3 targeting floorplates over 1,000 sqm compared to just 50% in Q2. This indicates a sustained appetite for prime large-format offices.
Occupancy Rates and Future Outlook
Grade A occupancy levels remained high at 98%, with average rents rising by 1.75% quarter-on-quarter and by an impressive 11% year-on-year. Zone A led annual rental growth at 16%, followed closely by Zone C at 14%. While rent growth shows early signs of moderation, the rent freeze policy provides predictability for occupiers.
Looking ahead, strong occupier demand is expected to persist while the rent freeze will help maintain price stability across both new and existing office buildings. Market momentum may moderate by late 2026 as approximately 900,000 sqm of Grade A space is delivered through landmark projects like Diriyah Gate.
The introduction of foreign ownership rights in 2026 will make Riyadh's office market more accessible to global investors, supporting greater liquidity and long-term growth potential.
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