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The average rental rates for office space in Riyadh are expected to rise in 2020, particularly for prime or Grade A offices, noted a recent report by JLL.
The ‘2019 Year in Review’ report said the rise is driven by the expected pick-up in demand for commercial space in line with the government efforts to promote privatization.
While the average Grade A office rents remained stable at SAR 1,350 per square meter (sqm) per annum in 2019, average rents in Grade B office spaces continued to soften to SAR 1,010 per sqm per annum.
Demand is expected to be driven by the public, finance, business and professional services sectors to support the Saudi Vision 2030 realization.
In 2020, Riyadh office market is expected to witness the delivery of additional 210,000 sqm of office space, which is 62% more than the office gross leasable area (GLA) delivered last year.
Notable projects include Majdoul Tower on King Fahad Road, phase 1 of Riyadh Medical Village, and phase 2 of Riyadh Business Front, JLL report said, adding that the nature of these projects is likely to be more quality mid-scale buildings.
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