Savills: Riyadh Office Rents Stabilise Amid Resilient Q4 Demand

Riyadh’s office market continued to demonstrate strong underlying momentum in Q4 2025, supported by Saudi Arabia’s positive economic backdrop and sustained occupier demand, according to Savills latest Riyadh Office Market Report.

In terms of the macroeconomic environment, real GDP expanded by 4.8% in 2025 and is forecast to moderate slightly to 4.3% in 2026, still providing supportive conditions for business activity. Non-oil sector growth reached 4.9%, reflecting continued progress in the Kingdom’s economic diversification agenda. The Purchasing Managers’ Index remained firmly in expansionary territory at 57.4 in December, marking 60 consecutive months above the neutral 50-point mark. Foreign direct investment maintained upward momentum, with Q3 inflows reaching SAR 24.9 billion, compared to SAR 16.0 billion in the same period last year. Oil production increased to 10.1 million barrels per day, a 5.2% rise quarter-on-quarter.

Commercial property transactions reached SAR 5.26 billion in December 2025, reflecting continued activity in the market.

Leasing activity remained consistent during Q4 2025, with the Technology, Media and Telecommunications (TMT) sector accounting for 60% of total transactions. Engineering and manufacturing and pharmaceutical occupiers each represented 20% of completed deals. Relocation activity continued to shape the market, comprising 60% of concluded transactions. The enquiry pipeline remained active, led by the BFSI sector, which generated 50% of total enquiries. Notably, 75% of enquiries were for office spaces below 1,000 sqm, with leasing enquiries evenly distributed across office sizes ranging from 200 sqm to 2,000 sqm, signalling stable occupier confidence and sustained demand across a broad range of space requirements. Savills reported that 75% of leasing enquiries in Q4 originated from US and UK companies, reflecting continued international interest.

Grade A office occupancy held steady at 98.5% in Q4 2025, supported by resilient business confidence and constrained prime supply. Average rents reached SAR 2,333 per sqm, rising 1.0% quarter-on-quarter and 12% year-on-year. Zone C recorded the strongest annual rental performance at 20%, followed by Zone A at 14%, reflecting continued demand for well-located, high-quality assets. Rental levels showed further signs of stabilisation during the quarter, supported by the rent freeze which continues to provide greater predictability for occupiers.

Riyadh’s five-year rent freeze, covering both residential and commercial sectors, is contributing to greater market stability. Following previous rental increases, Q4 data indicates that rent levels have broadly stabilised, with only modest movement observed across prime office stock.

Riyadh continues to strengthen its position as a regional business hub. As of late October 2025, more than 700 global companies had established their regional headquarters in the city, surpassing the Vision 2030 target of 500 companies comfortably ahead of schedule. New entrants in Q4 included Darktrace, Union Bancaire Privé, The Edge and the National Bank of Egypt.

Commenting on the findings, Ramzi Darwish, Head of Saudi Arabia at Savills Middle East, said, “Riyadh’s office market continues to reflect the broader strength of the Kingdom’s economic transformation. Sustained occupier demand, high Grade A occupancy levels and steady enquiry activity demonstrate confidence in the market. While rental growth has moderated, market fundamentals remain supportive, particularly as new supply enters the pipeline and foreign ownership measures enhance accessibility for international investors.”

Looking ahead, over 950,000 sqm of Grade A office space is expected to enter the market by late 2026, including landmark projects such as Diriyah Gate, Prime Business Resort and the Prince Mohammed bin Salman Nonprofit City (Misk). With foreign direct ownership anticipated next quarter, Riyadh’s office market is expected to become more accessible to international investors, further supporting liquidity and market depth.