Saudi Arabia office real estate market (purchase/lease, Manufacturing and service sector contribution, Contribution of Oil and Gas Sector); Regulatory environment and Investment structure; Riyadh office real estate market by (demand and supply, Average rental rate, by location); Case Study on (Elegance Tower, Al Saedan Towers, Tijan Plaza, Hamad Tower, Tatweer Tower)
December 2017 |Riyadh News
- Constant supply of office space in the market will keep the rental at constant level with very little fluctuation.
- Demand for office space is expected to rise as contribution of banking, insurance, tourism and business processes in services sector rise in the economy.
- Government initiatives to ease FDI and promote private participation in finance of real estate and other businesses is expected to boost the supply as well as demand market in the Riyadh office real estate market.
Supply of office real estate is expected to register constant increase with positive CAGR during 2017-2021. As grade A and B office space development have concentrated primarily on King Fahad and Olaya roads in Al Olaya district traffic congestion, lack of parking spaces and increasing rents has led the upcoming developments scattered along different arterial roads predominantly on northern side of the city. Completion of Riyadh metro will make north a more attractive option for new and upcoming offices. It is expected that completion of KAFD, ITCC and Nakhla tower will add over a million square meters. This will make the northern part of Riyadh a key office destination replacing CBD. Majority of the office space developed in this area is of the A and B type. Governments plan to cut down the staff by 20% may have negative impact on the Riyadh office space market, however plans such as Vision 2030 and NTP 2020 are expected to have positive impact on the demand for office spaces in the city.
Demand for office real estate is expected to remain positive however rental rates will register fluctuation remaining almost constant at around its 2016 level. Governments focus on promoting financial inclusion, connectivity services and manufacturing sector will create majority of the future demand for office space in the city. Riyadh employs more than quarter of the workable population in Saudi Arabia and will continue its dominance in workforce employment creating huge demand in future.
Ken Research in its latest study, Riyadh Office Real Estate Market by Major Projects (Elegance Tower, Al Saedan Towers, Tijan Plaza, Hamad Tower, Tatweer Tower) -Outlook to 2021, observed that North will emerge as the new centre for office real development. Dedicated areas catering to specific set of industries will boost the development of clusters which will create well defined demand for specific type of offices. Government role in easing norms for foreign investment and way of living for expats in certain areas will help it to attract best talent to develop the country and business.
Riyadh office real estate market is estimated to register a positive CAGR during 2017-2021. The report provides information on the supply and demand of office space in Riyadh along with explanation for supply and demand gap. It also covers the distribution of office space by major regions in the city and average rental rates for different types of buildings.
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