Riyadh adds 10 times as much office space as Dubai

• Demand still ahead of supply
• Increase to accelerate threefold
• Rush for Riyadh HQs

Riyadh added the most office space of any Middle Eastern city last year, nearly 10 times as much as its regional rival Dubai.

However, the additional supply is unlikely to ease a chronic shortage of prime commercial property in the Saudi capital in the short term.

Riyadh, which has a population of seven million, added 327,000 square metres of new office space in 2024, according to the global property consultancy JLL. 

Dubai, which has a population of 3.8 million, completed just under 37,000 square metres, almost 90 percent less.

• Dubai WFH push unlikely to curb strong office space demand

• Foreign companies push up cost of Riyadh’s scarce office space

• Sharp slowdown in companies opening Saudi HQs

In 2024 rents on grade A office space in Riyadh rose by 11 percent to $609 per square metre, while rents for grade B space were up 20 percent to $414 per square metre, roughly in line with Dubai and slightly higher than Abu Dhabi, JLL said.

Despite its smaller population, Dubai already has 9.3 million square metres of office space, against Riyadh’s 7.6 million square metres.

Supply in the Saudi capital is struggling to keep pace with demand. Office vacancy rates in Riyadh remain under 1.4 percent, while yields are steep, at between 7.25 percent and 8 percent.

The JLL report said that foreign investors have struggled to break into the Saudi property market “primarily due to the lack of availability of quality stock and strong competition from liquid local institutional market participants”. 

Despite attempts by “a diverse range of institutional investors from various regions” to invest, landlords in Riyadh still tend to be overwhelmingly Saudi and largely institutional, JLL said.

Office space in Riyadh is expected to increase by a further 889,000 square metres in 2025, almost three times more than in 2024, as both foreign and domestic businesses expand their presence in the Saudi capital, JLL said.

More than 600 companies have established regional headquarters in Saudi Arabia since the government’s Saudi regional headquarters programme was launched in 2021, the Saudi Press Agency reported earlier this month.

Saudi Arabia expects its non-oil economy to grow by 5 percent in 2025, with Riyadh likely to take the lion’s share of growth. 

The property consultancy Knight Frank has previously estimated that the Saudi Arabian construction sector could be worth $182 billion by 2028, potentially making it the largest in the world.