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Grade A rents in Riyadh rose 31% y-o-y to SAR 2.6k per sqm in 3Q 2024, while Grade B rents rose 27% to SAR 1.3k per sqm, according to Knight Frank’s Autumn 2024 Saudi Arabia Commercial Market Review (pdf). In Jeddah, the price of Grade A remained basically unstable, while those in Grade B grew 3.8% y-o-y to SAR 810 per sqm. Grade A rents in DMA saw a 2.2% uptick to SAR 1k per sqm, while Grade B rents were up 3.2% y-o-y to SAR 640 per sqm.
Meanwhile, occupancy rates remain largely unchanged: Occupancy rates in Riyadh’s Grade A offices have remained stable at 97% by the end of the third quarter, while those of Grade B offices in the capital were up 5 percentage points y-o-y to 95%, with “the limited availability of office space” pushing Grade B rents up, said Partner and Head of Research, Faisal Durrani said in a press release. In the Grade A market, occupancy was down by one percentage point y-o-y to 94% in Jeddah, and up 7% y-o-y to 87% in Dammam.
REMEMBER- Rent has been a major driver of consumer inflation in the Kingdom, with house rental prices — the heaviest weighted component in the domestic consumer basket — rising 11.2% y-o-y in September on the back of a 10% surge in apartment rentals. Real estate services provider Savills Research said that Riyadh’s office market remained strong in 2Q, supported by growth in the non-oil sector. Knight Frank also highlighted the growing demand for office space in its summer review.
