As Riyadh and Jeddah experience a surge in office rents, the real estate landscape in Saudi Arabia faces unprecedented vacancy lows. The demand for high-quality office spaces has escalated due to economic growth and urban development initiatives, leading to significant rental increases in these two major cities. With Riyadh and Jeddah office rents surging as Saudi vacancies hit record lows, businesses are navigating a challenging yet opportunistic market environment.
The report highlights that landlord-favorable conditions dominate the two cities, with prime and Grade A office vacancies at historic lows.
In Riyadh, prime office spaces registered a vacancy rate of just 0.5 percent in Q2 2025. Grade A and B vacancies were also constrained at 3.8 percent and 2.9 percent, respectively. Jeddah mirrored this trend, with Grade A and B vacancies standing at 3.3 percent and 2.2 percent. This scarcity of available spaces has contributed to the escalating office rents in these regions.
Rising Rental Rates in Riyadh and Jeddah
This surge in occupier demand has fueled notable rental increases. Prime rents in Riyadh rose by 7.3 percent year-on-year to reach SR3,630 ($968) per sq. m. per annum, with areas like King Abdullah Financial District (KAFD) exceeding SR4,000 ($1,067) per sq. m. This upward trajectory in office rents in Riyadh and Jeddah is a clear indication of the growing confidence in the market.
Jeddah also recorded solid growth, with Grade A rents rising 4.3 percent to SR1,393 ($372) and Grade B rents up 6.5 percent to SR933 ($249) per sq. m. The vibrant demand for high-quality office spaces is truly reflective of the evolving business landscape in these cities.
Market Dynamics and Future Outlook
The Dammam Metropolitan Area (DMA) presented higher vacancy rates—17.2 percent for Grade A and 21.4 percent for Grade B—but still registered rental growth. Grade A rents increased by 8.2 percent to SR994 ($265) per sq. m. per annum, reflecting continued demand despite oversupply. The dynamics of Riyadh and Jeddah office rents surging amidst low vacancy rates highlight the distinct characteristics of each market.
Saud Al Sulaimani, Country Lead and Head of Capital Markets at JLL Saudi Arabia, noted: “The continued expansion of the KSA office market directly reflects the Kingdom’s strategic vision for economic diversification and urban development.” He emphasized that Riyadh’s performance, spurred by the flight to quality and the Regional Headquarters Program, solidifies its position as a key business hub, reinforcing the tendency of Riyadh and Jeddah office rents to surge in this competitive landscape.
Al Sulaimani added that the market is evolving with a more diverse occupier base and greater demand for flexible workspaces and premium amenities, indicating a significant shift in the preferences of tenants.
Office Space Expansion and Trends
Riyadh’s total office stock reached 8.1 million sq. m. in Q2 2025, with 0.66 million sq. m. expected to be completed by year-end. High demand has driven residential-to-office conversions and spurred leasing in the city’s northern districts. Notably, healthcare, pharmaceuticals, and technology companies have joined in on the leasing momentum, showcasing an expansive growth strategy among various sectors.
Meanwhile, Jeddah added 81,887 sq. m. of new office space in H1 2025, bringing its total stock to 2.97 million sq. m. A further 42,680 sq. m. of gross leasable area (GLA) is set to be delivered in H2 2025, illustrating the ongoing commitment to expanding the office market despite the current rental growth trends.