Riyadh Drives GCC Office Market Boom With Soaring Grade-A Rents: Knight Frank

RIYADH: Saudi Arabia is driving a surge in prime office rents across the Gulf, with Riyadh leading the region’s near-record growth as demand intensifies for high-quality, environmental, social, and governance-compliant workspace, according to a new report by Knight Frank. 

The UK-based consultancy said the Kingdom’s capital continues to anchor the Gulf Cooperation Council’s office market expansion, propelled by giga-project activity and the Regional Headquarters Program. 

Across the region, major hubs including Riyadh, Dubai and Abu Dhabi recorded double-digit rental growth, supported by limited prime supply and accelerating corporate demand. 

Saudi Arabia leads the regional surge, with Riyadh at the forefront due to giga-project activity and the Regional Headquarters Program. 

Grade-A rents in the capital rose 15.1 percent year on year in the third quarter of 2025 to SR2,750 ($732.78) per sq. meter, while grade-B rents climbed 16.5 percent.  

Occupancy rates remain elevated, averaging 98 percent for grade-A and 95 percent for grade-B buildings.  

Faisal Durrani, partner and head of research, MENA at Knight Frank, said: “Office markets across the region continue to remain undersupplied, with high levels of demand underpinning strong rental growth.”  

 

He added: “Government initiatives and macro-economic diversification strategies are translating into strong non-oil GDP (gross domestic product) growth, which is in turn supporting real estate demand, particularly for office assets that meet modern corporate mandates around quality and ESG standards.”  

RHQ program drives demand 

James Hodgetts, partner in occupier strategy and solutions, MEA at Knight Frank, noted: “The common thread across the GCC is the flight to quality, with blue-chip tenants and multinational firms prioritizing premium, future-proofed office space, signaling enduring confidence in the region's economic stability and growth prospects.”  

According to Hodgetts, the Regional Headquarters Program has drawn over 780 multinational firms to Riyadh, led by companies from the US at 41 percent, the UK at 19 percent, China at 8 percent, and Germany at 4 percent. “The scarcity of prime space is evidenced by near-full occupancy rates,” he said.  

A recent five-year rent freeze policy in Riyadh, implemented after an 86 percent increase in grade-A rents since 2019, is aimed at stabilizing the market.  

“While this aims to shield existing occupiers from further sharp uplifts, grade-A rents experienced a 10 to 15 percent surge in some prime locations immediately preceding the announcement, reflecting market anticipation,” said Amar Hussain, associate partner-research, MENA at Knight Frank.  

Jeddah and DMA see steady growth 

Jeddah’s market is also strengthening, supported by projects such as the planned $1 billion Trump Plaza Jeddah.  

Grade-A rents increased by 1.3 percent year on year in the third quarter of 2025 to SR1,251 per sq. meter, with occupancy at 92 percent.  

Hussain attributed the momentum to “Saudi Arabia’s aggressive reform agenda, underscored by the Regional Headquarters program and giga-project mobilization — accounting for $196 billion in awarded construction contracts since 2016.”  

Across Saudi Arabia’s three major cities, Riyadh, Jeddah, and the Dammam Metropolitan Area, office stock is projected to grow from 9.7 million sq. meters in 2025 to 15 million sq. meters by 2028, with Riyadh accounting for nearly half of this pipeline.  

However, Knight Frank expects near-term conditions to remain tight due to persistent supply shortages.  

Dubai sees sharp rental growth 

In the UAE, Dubai’s office market is characterized by strong demand, particularly from business services at 41 percent and technology at 31 percent.  

Prime locations such as the Dubai International Financial Centre command shell-and-core rents of 425 dirhams ($115.72) per sq. foot.  

Emerging submarkets, including Downtown Jebel Ali and Dubai Silicon Oasis, posted quarterly rental growth of 20 percent and 27 percent, respectively.  

Looking ahead, Dubai is projected to add 13.2 million sq. feet of office space by 2030, including 3.3 million sq. feet in the Dubai International Financial Centre.  

The build-to-rent model is becoming more prevalent, reflecting developers’ long-term strategies to retain income-generating assets.  

Abu Dhabi’s Grade-A rents climb 

Abu Dhabi also recorded a notable performance, with grade-A office rents rising 28 percent year on year in the third quarter of 2025 to 2,300 dirhams per sq. meter. 

 

Business services at 22 percent and banking and finance at 19 percent are driving demand, with leasing activity shifting to emerging districts such as Industrial City, Mohamed Bin Zayed City, and Musaffah.  

New developments like the 22,171 sq. meter Saas Business Tower and Aldar’s HB Tower on Yas Island, which is already 98 percent occupied, are contributing to Abu Dhabi’s evolving market.  

An additional 175,000 sq. meters of new space is scheduled for delivery by 2027.  

Qatar consolidates around Lusail 

In Qatar, the office market is undergoing strategic consolidation, with tenants relocating from West Bay to Lusail.  

Though headline rents declined 2.2 percent year on year in the third quarter of 2025, occupancy in prime assets remains strong.  

The relocation of the Qatar Financial Centre to Lusail Boulevard and the growing presence of institutional tenants such as Qatar Central Bank and Qatar National Bank underscore the shift.  

Qatar’s total office stock currently stands at 6.5 million sq. meters, with 146,000 sq. meters of new space due by 2027.