Occupancy rates for premium office spaces have remained at 98% while average rents keep rising with the latest record showing a 10% YoY increase. Q2, 2025 ended with strong business confidence, steady demand, and limited supply. Notably, Riyadh continues to attract foreign companies seeking to establish their headquarters. By mid-2025, the government had issued over 660 licenses for international companies to set up headquarters in Riyadh. With renowned brands such as London Business School, ASPEN, and BNY Mellon entry, exceeding the 2030 Vision target was within expectations. The developments in the real estate sector in Q2, 2025 has stirred concerns regarding the office vacancy. Many potential investors at the local and international levels are attracted to the city but remain uncertain regarding the office spaces.
Read also: Office Market Trends in Saudi Arabia’s Real Estate
Let’s look at the 2025 office vacancy in Riyadh
Overview of Office Supply
At the close of 2024 Grade A office rent in Riyadh had climbed by 31% to reach SAR 2,605 psm while Grade B rent increased by 27% to reach SAR 1,335 psm. The upward trajectory has remained steady given the increased demand and foreign direct investment in Q1 that was valued at SAR 22.2 billion.
New trends have since revealed that the office sector is approaching its peak at 98% occupancy rates for both Grade A and B. Nonetheless, efforts to transform Riyadh into a global business hub has seen major office spaces planned for delivery. For instance, more than 900,000 offices are expected from Diriya Gate and Misk which is Prince Mohammed Bin Salman Nonprofit City. The future may be brighter for investors in the office sector since more than 47% of international inquiries for office space are coming from UK and US.
Office Rental Growth Between 2024 and 2025
Vacancy is almost non-existent. Grade A offices in Riyadh held steady at 98% occupancy through late 2024 into mid-2025. It’s less ghost town, more red-hot market.
Rents followed suit:
2024: Year-on-year increases of around 10%, and even sharp gains of 21% YoY were reported toward year end.
Q1 2025: Another 12% YoY jump, with 2.5% QoQ growth. Riyadh even ranked among the world’s fastest-growing prime office cost markets.
By March 2025, Grade A rents hit a record SAR 2,700/m², marking a massive 23% YoY rise. Grade B offices weren’t far behind—with 24% growth.
Clearly, office space is a hot ticket, and vacancy rates reflect that across the board.
Infrastructural Support for Office Sector
Why the surge? Riyadh’s infrastructure push is turbocharging commercial appeal.
The Riyadh Metro is already shifting over 25 million passengers in Q1 2025, enhancing access to key business zones like KAFD and Olaya.
Visionary developments such as Digital City, Laysen Valley, and the King Abdullah Financial District (KAFD) are transforming Riyadh into a cohesive business ecosystem.
The economic backdrop is bulletproof: non-oil GDP is growing (~4.5% in 2024, expected ~5.8% in 2025), FDI is surging, and global firms are establishing regional HQs by the dozens.
Put simply, infrastructure isn’t just support, it’s the magnet pulling demand and minimizing vacancy in the office space.
Long-Term Office Supply Pipeline
High demand meets tight supply until the pipeline opens up.
2024–2025: Supply remains constrained. Early phases of KAFD, Laysen Valley, and Digital City offered limited relief. Vacancy stayed ultra-low.
Through end-2026, around 900,000 m² of new Grade A space will come online via major developments like Diriyah Gate and Prince Mohammed bin Salman Nonprofit City (Misk).
By 2028, that pipeline balloons to 1.6 million m², further expanding capacity and easing pressures.
That said, in the short term the vacancy remains tight. But the medium-term horizon looks more balanced with better options for tenants, and strategic entry points for investors.
In sum…
In Riyadh, office vacancy is practically a myth. With occupancy at 98% and rental growth soaring to over 20% YoY the market screams demand. Infrastructure gains and bold projects like the Metro and KAFD fuel confidence and drive. And while upcoming supply (nearly 900K to 1.6M m²) may gently ease the heat, it won’t cool things enough to thaw the opportunity.
For real estate investors, that spells one thing: act now, while vacancy is low and momentum is high.