Riyadh – Sharikat Mubasher: Saudi Arabia’s push for regional headquarters has driven a surge in office space demand in Riyadh, with 1 million sq. meters expected by 2026, bringing the total to 6.3 million sq. meters.

According to Knight Frank’s Autumn 2024 Saudi Arabia Commercial Market Review, the regional headquarters program, part of Vision 2030, has attracted 517 companies to establish regional HQs in the Kingdom, with a target of 480 multinational corporations by 2030.

This demand has pushed office rents higher, especially in Riyadh, where Grade A lease rates have risen 31% in a year to SAR 2,604 ($693) per sq.meter. Limited availability has also driven up Grade B rents by 27%.

Beyond Riyadh, other cities are also benefiting. Jeddah’s office market has shown steady growth, with Grade A rents climbing 2.9% to SAR 1,235 per sq. meter and Grade B rents rising 3.8% to SR810 per sq.meter over the past year. While Grade A occupancy in Jeddah dipped slightly to 94%, Grade B occupancy increased to 90%. In the Dammam Metropolitan Area, Grade A rents have risen by 2.2%, driven by strong demand from the public sector.

The Kingdom has introduced various policies to incentivize companies to relocate, including restricting government contracts with firms that lack regional headquarters and issuing detailed guidelines on the Invest Saudi portal. These measures have spurred national office market growth, particularly in key urban centers like Riyadh, Jeddah, and Dammam.