Savills: Riyadh Office Demand Stable as Rent Growth Moderates

Riyadh’s office market continues to demonstrate steady underlying momentum, with recent data pointing towards a more balanced phase of growth, according to Savills latest Office Market report for Q1 2026.

While broader economic conditions have moderated slightly, partly reflecting the effects of ongoing regional geopolitical tensions, including disruption to oil export flows through the Strait of Hormuz. Saudi Arabia’s non-oil sector continues to expand, supporting business activity and occupier demand across the capital. Real GDP growth is projected at 2.6% for 2026, with non-oil growth expected to reach 3.6%, reflecting ongoing progress in economic diversification.

Occupier demand remained consistent during the first quarter, with Grade A office occupancy levels holding firm at 98.5%, highlighting continued pressure on prime supply. Leasing activity was supported by a diverse range of sectors, led by BFSI, alongside engineering, manufacturing, TMT (Technology, Media and Telecommunications) and pharmaceutical occupiers.

Demand continues to be driven by smaller office requirements, with units below 1,000 sq m accounting for the majority of enquiries, reflecting a preference for flexible and efficient workspace solutions among occupiers.

At the same time, rental growth has begun to moderate, increasing by 1.0% quarter-on-quarter and 6% year-on-year. Prime rents reached SAR 2,896 per sq m in Zone A (central Olaya/KAFD corridor) and SAR 2,457 per sq m in Zone C (southern district), indicating a shift towards a more measured pace of growth following previous periods of stronger increases, supported in part by the implementation of Riyadh’s five-year rent stabilisation policy and softer external conditions stemming from regional geopolitical developments.

Ramzi Darwish, Head of Saudi Arabia at Savills Middle East, commented, “Riyadh’s office market is continuing to evolve, with occupier demand remaining steady despite a more measured pace of growth. While we are seeing some moderation in rental increases compared to previous periods, underlying activity levels remain consistent, particularly across Grade A assets. This reflects a market that is becoming more balanced, with occupiers placing greater emphasis on quality, location and long-term value.”

This trend is further supported by the implementation of Riyadh’s five-year rent stabilisation policy, which has contributed to greater pricing consistency across both residential and commercial assets, enhancing cost visibility for occupiers and supporting longer-term planning.

Riyadh’s growing appeal as a regional business hub continues to underpin demand, supported by sustained inflows of multinational companies. As of early 2026, more than 700 global companies have established regional headquarters in the city, surpassing Vision 2030 targets ahead of schedule.

International interest remains strong, with 80% of leasing enquiries in Q1 originating from US-based companies, reinforcing Riyadh’s positioning as an increasingly attractive destination for global occupiers.

Looking ahead, the market is expected to continue evolving as new supply is delivered, with over 700,000 sq m of Grade A office space anticipated to come online by late 2026, including developments such as Diriyah Gate, Prime Business Resort and Prince Mohammed bin Salman Nonprofit City (Misk).

While additional supply is expected to provide greater choice for occupiers, demand for well-located, high-quality assets is likely to remain a key feature of the market.