Saudi Arabia: Foreign Companies Influx Raises Office Rental Prices

The influx of foreign companies to the Saudi local market, along with several other factors, has led to an increase in office space rental prices by 20 percent.

Saudi Arabia issued more than 1,600 foreign investment licenses in the first quarter of 2023, with an average of 25 per day, according to the latest official report by the Ministry of Investment.

Experts told Asharq Al-Awsat that the high demand was due to the establishment of new government and private bodies and entities, and the increased entry of foreign companies into the local market.

The specialists revealed that the occupancy rate in category A office space has increased to 97 percent.

The director of real estate and property at Olaya Company, Mohammad Al-Omari, told Asharq Al-Awsat that office rental prices increased by 15 percent during the last 12 months.

CEO of Menassat Khaled Al-Mobid told Asharq Al-Awsat that demand for offices would increase in the coming period, due to the entry of foreign companies and the growth of commercial sectors, given the scarcity of supply that led to a 20 percent rise in the rental value.

A recent report issued by Invest in Saudi Arabia, one of the initiatives of Vision 2030, showed that more than 1,600 foreign investment licenses were granted in the first quarter of this year, compared to 1,300 in the last period of 2022, marking an increase of 2.3 percent.

The report expected the building and construction sector to continue to provide great opportunities for investors with the launch of mega and huge projects within the Kingdom’s development plans in the tourism and housing sectors.

The Saudi government completed 104 investment deals during the first quarter of 2023, compared to around 101 during the same period last year, recording an increase of about 3 percent.

Provided by SyndiGate Media Inc. (Syndigate.info).