Latest news with #office market
Zawya
6 days ago
- Business
- Zawya
Savills: Riyadh Office Market holds firm as rents and occupier demand continue to rise
Riyadh's office market continued to perform strongly in Q2 2025, underpinned by a stable economic outlook, high business confidence, and growing interest from international occupiers, according to the latest research from Savills. The Kingdom's economy is forecast to expand by 3.5% in 2025, driven by a 4.9% rise in the non-oil sector, a clear indicator of the ongoing success of Saudi Arabia's diversification agenda. Business sentiment remained upbeat, with the Purchasing Managers Index (PMI) climbing to 57.2 in June, its highest reading since May 2011, signalling strong private sector activity and employment growth. Foreign direct investment also continued on an upward trajectory, reaching SAR 22.2 billion in Q1 2025, up from SAR 15.5 billion during the same period last year. Within the office market, Grade A occupancy stood firm at 98%, reflecting sustained tenant demand amidst a limited supply pipeline. Average rents rose slightly by 0.75% on a quarterly basis but recorded a 10% increase year-on-year. Zone C, home to emerging hubs such as Riyadh Front. Digital City, and Laysen Valley, led annual rental growth at 15%, while Zone A, which includes prime locations such as Olaya, KAFD, and Kingdom Centre, followed closely with nearly 11%. This highlights the continued appeal for both well-established commercial districts and newer, strategically located developments. Chris Chambers, Head of Transactional Services in KSA, commented: 'We're seeing strong expansion-driven activity across sectors, particularly within banking, financial services and insurance (BFSI) accounting for 50% of transactions this quarter. Legal and pharmaceutical firms each contributed a further 25% underscoring the depth and diversity of demand. Notably, leasing interest is increasingly shifting towards larger spaces, with half of all enquiries targeting units above 1,000 sq m.' Multinational interest in Riyadh remains high. By mid-2025, over 660 global companies had been licensed to establish regional headquarters in the city, already surpassing the Vision 2030 target of 500. Notable new entrants in Q2 include BNY Mellon, ASPEN, Globant, and London Business School. Enquiry data from Savills shows that 46% of leasing interest this quarter originated from the US and UK, reflecting strong global confidence in the Saudi capital. Sector-wise, the highest levels of leasing enquiries came from banking and financial services, technology, media and telecoms (TMT), and engineering and manufacturing, highlighting Riyadh's broadening commercial base and appeal to knowledge-driven industries. The capital's infrastructure push also continues to support its commercial growth. The Riyadh Metro saw over 25 million passengers in Q1 2025, and the addition of new stations is expected to further enhance accessibility to key areas such as the King Abdullah Financial District (KAFD) and Olaya. Looking ahead, while rental growth is likely to remain firm in the near term due to ongoing demand and limited supply, the pressure is expected to ease slightly towards the end of 2026, with more than 900,000 sq m of new Grade A stock scheduled to be delivered through major developments such as Diriyah Gate and Prince Mohammed bin Salman Nonprofit City (Misk). For further insights and detailed analysis, download the full Riyadh Office Market in Minutes Q2 2025 report from here. About Savills Middle East: Savills plc is a global real estate services provider listed on the London Stock Exchange. With a presence in the Middle East for over 40 years, Savills offers an extensive range of specialist advisory, management and transactional services across the United Arab Emirates, Oman, Bahrain, Egypt, and Saudi Arabia. Expertise includes property management, residential and commercial agency services, property and business assets valuation, and investment and development advisory. Originally founded in the UK in 1855, Savills has an international network of over 700 offices and associates employing over 40,000 people across the Americas, UK, Europe, Asia Pacific, Africa, and the Middle East.
Arabian Business
21-07-2025
- Business
- Arabian Business
Cairo office market to expand by 82% by 2029, says Knight Frank report
Cairo's office market is set to grow significantly, with total stock expected to rise by 82 per cent by 2029, according to Knight Frank's latest Cairo Offices Market Review. The report highlights rising rents and sales prices across the city in the first half of 2025, as demand continues to grow. Faisal Durrani, Partner – Head of Research, MENA, Knight Frank, said: 'Cairo's current office stock stands at 1 million sqm, with an additional 818,000 sqm slated for delivery by 2029. This represents an 82 per cent growth in the office market and reflects Cairo's growing economy and its increasing appeal as a regional business hub, attracting both local enterprises and international corporations.' New Cairo leads office market surge The city's performance also features in Knight Frank's Africa Office Market Dashboard H1 2025, which tracks trends across 29 African cities. The Egyptian capital is ranked as one of the top-performing office markets on the continent, second only to Lagos in terms of prime rents. New Cairo plays a leading role in this expansion, accounting for 73 per cent of the city's current and future office stock. It also records the highest sales values, with an average price of EGP 274,000 per sqm in H1 2025 and premium spaces reaching EGP 466,000 per sqm. Durrani added: 'New Cairo's dominance extends to the office leasing sector, where New Cairo recorded the highest rents and year-on-year growth exceeding 2 per cent. This consistent performance cements its position as the city's premier destination for businesses seeking prime, well-connected office locations that offer both prestige and functionality.' Flexible office providers such as MQR, KAPITALIZE, KMT House, CO-55, and Regus continue to grow their presence in the area. The International Workplace Group (IWG) has also announced plans to expand its footprint in Egypt from 18 to 150 locations by 2030. Developers are supporting market growth by offering extended instalment durations and reduced down payments. Projects set to be delivered in 2025 have an average payback period of 4.4 years, while those completing in 2029 see this extend to 7.8 years. 'This extended payment flexibility is a crucial incentive, designed to make investment more accessible and attractive to a wider range of businesses and investors by easing the financial burden and encouraging long-term commitments to the market,' the report noted. Zeinab Adel, Partner – Head of Egypt, Knight Frank, further explained: 'Real estate investment is growing across the MENA region and Cairo offers a more affordable option than other nearby GCC markets. These lower barriers to entry for GCC and international investors are helping to fuel further growth, while the longer instalment periods offered by developers not only encourage investment, but also highlight the increasing confidence in the market's sustained growth.' While New Cairo leads the market, West Cairo is emerging as an alternative for companies looking beyond the primary hub. El Sheikh Zayed recorded average sales prices of EGP 229,000 per sqm, while 6th of October City saw average prices around EGP 171,000 per sqm. Adel said: 'El Sheikh Zayed, 6th of October City and West Cairo offer distinct advantages, including proximity to residential communities and a growing commercial ecosystem, making them viable alternatives for businesses expanding or relocating within Cairo.' He added: 'New Cairo offices command the city's highest average prices thanks to the area's modern infrastructure, strategic location and the concentration of high-profile businesses and amenities. However, when you look at the maximum sales prices achieved, the gap between New Cairo, El Sheikh Zayed and 6th of October City narrows, suggesting compelling opportunities exist for investors looking for a more accessible entry point into the Cairo market.' Despite a projected dip in new supply in 2026, the market is expected to grow in the following years. Supply is forecast to peak in 2028 at 309,000 sqm, representing 38% of the total future pipeline to 2029. Major developers contributing to this expansion include LMD, The Waterway Developments, Centrada Developments, La Vista Developments, SERAC Developments and SODIC. Their investments are increasing stock and contributing to the range and quality of office space available. 'These developments are collectively shaping Cairo's urban landscape, reinforcing its status as a thriving business hub in the region and a magnet for both domestic and international investment. Our research paints a picture of a market in full swing, characterised by strong fundamentals, strategic developer initiatives and a promising outlook for continued growth and investment, solidifying Cairo's position on the global business stage,' he concluded.
Bloomberg
21-07-2025
- Business
- Bloomberg
London Office Market Recovery Gathers Pace Due to Space Shortage
A year on from its nadir, London's office market recovery is gathering steam as a lack of new development and a rebound in demand for space begins to chip away at a vacancy rate that peaked at its highest this century. Prices were up 6% at the end of June from a year earlier, according to an index of transactions compiled by real estate data provider CoStar Group Inc. The recovery began in the second half of last year as vacancy rates finally topped out at almost 11% after more than four years of virtually uninterrupted increases since the onset of the pandemic, CoStar's data show.
News.com.au
17-07-2025
- Business
- News.com.au
Trump role in Melbourne CBD office market's suburb-sized hole
Melbourne's CBD has a suburb-sized hole in its office market as workers refusing to return and Donald Trump's tarrifs further delay it's already difficult recovery from the pandemic. Commercial real estate firm JLL research shows the city recorded its second straight quarterly improvement in increasing office space take up in the past quarter, with 11,900sq m more space filled at the end of June than at the end of March. They've estimated rising demand chewed through 50,000sq m of vacant office buildings across the first half of 2025, dragging the CBD's total office vacancy rate back below more than a million square metres, where it peaked late last year. Annabel McFarlane, Head of Strategic Research at JLL calculated that without any major changes to the available supply of office space, about 385,870sq m of it, an area bigger than the Botanic Gardens, still needed to be filled in order to recover to its 10-year average vacancy rate of 11.2 per cent. Currently, about 18.2 per cent of the city's office space, or 983,830sq m is empty — bigger than some suburbs, including Ripponlea and Gardenvale, and close to the size of Cremorne and Deepdene. 'However, we are already seeing the best assets and locations start to fill up,' Ms McFarlane said. 'Melbourne's CBD prime net effective rental growth returned to positive in the second quarter of 2025 and secondary net effective rents have stabilised.' If the city continued to fill another 50,000sq m of office space every six months, it would take most of four years to get back to its pre-pandemic self. However, JLL joint head of leasing advisory Nick Drake said it was likely to be faster than this, with rising population driving increased demand for space in the CBD — as well as a trend of head offices for major firms heading to the city from the suburbs this year, including Coles, home builder Simonds and logistics firm Toll Group. 'Melbourne's demand factors are stronger than a lot of the rest of the country, and it's affordable compared to other cities,' Mr Drake said. 'There will also be some buildings that will be converted to other uses. And there's some sites that have just been shelved for now as development is hard to stack up, so we won't see a lot more coming up for the rest of the decade.' He added that there could also be significant boosts to leasing activity as fallout from US President Donald Trump's tariff policies settles in the coming months, with the confidence boost that stability would bring potentially enough to fill another MCG or two of CBD office space. With the past quarter's office uptake softer than the first three months of the year, Mr Drake noted many businesses were looking but not committing to leases amid the fallout of Trump's announcements. Another major change of direction could come if more businesses set return to office mandates, with a growing share of CBD-based firms now requiring their staff to attend the building at least three days a week. Melbourne became the most locked-down city in the world during the Covid-19 pandemic, and its office workers have been among the slowest in the nation to return to their buildings. That lack of staff returning has led to a number of large operators downsizing office spaces in the city's centre, and to it having the highest vacancy rate in the nation. By contrast to the Victorian capitals more than 18 per cent vacancy rate in June, less than 10 per cent of Brisbane's office space is currently seeking a tenant. And while Melbourne's June quarter office space absorption covered 11,900sq m, the figure in Sydney was 23,500. Further positives in the JLL market analysis included a 1.4 per cent increase in rents over the past three months. There is also rising strength in the city's most popular destinations, with the east end of Collins St, also known as the Paris end of the popular strip, now becoming difficult for firms to find any space in. Demand is also up at the west end of Collins, and improving in Docklands, but relatively flat around most other parts of the CBD.
