22-05-2025
Riyadh Office Costs Rise Fastest Globally In Q1 2025 As Demand Surges
Riyadh has emerged as one of the world's ten most expensive markets for prime office space, driven by rapid cost increases and sustained high occupancy, according to Savills' Riyadh Office Market Report for Q1 2025.
The Saudi capital saw average prime office rents rise 2.5% quarter-on-quarter and 12% year-on-year. Occupancy rates remained steady at 98%, highlighting the limited availability of high-quality office space and continued business confidence.
The growth is largely attributed to activity across sectors such as consulting, IT, legal, and pharmaceuticals. Notably, 50% of transactions in Q1 came from new market entrants, while 70% of enquiries were for units under 1,000 square metres — underscoring a shift toward flexible, efficient workspaces.
Riyadh also recorded the fastest increase in global prime office occupancy costs, rising 5.2% in the first quarter. This metric includes rent, service charges, fit-out expenses, and other occupier costs — offering a comprehensive view of leasing expenditures.
The city now ranks alongside global commercial hubs such as London, New York, Dubai, and Hong Kong in the Savills Global Prime Office Costs report.
'We're witnessing a pivotal moment for Riyadh,' said Ramzi Darwish, Head of Savills Saudi Arabia. 'With demand outpacing supply and international occupiers expanding, Riyadh is fast becoming a preferred base for global business.'
Major companies such as Salesforce, PepsiCo, Kaplan, and APEX established regional headquarters in Riyadh during Q1, bringing the total to over 540 — surpassing Vision 2030 targets ahead of schedule.
While new supply in 2025 will be limited, more than 900,000 square metres of Grade A office space is expected to be delivered by the end of 2026, including major projects like Diriyah Gate and Prince Mohammed bin Salman Nonprofit City.
With Saudi Arabia's recent credit rating upgrade to A+ by S&P Global and continued investment in infrastructure such as the Riyadh Metro, the city is poised to strengthen its position as a leading commercial hub in the Middle East and beyond.
