Riyadh sees 19% surge in Grade A office space rents in H1: JLL

Riyadh sees 19% surge in Grade A office space rents in H1: JLL
According to JLL, Riyadh added approximately 52,000 sq. meters of office space, bringing the total market supply to 5.2 million sq. meters. Shutterstock
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Updated 20 October 2024
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Riyadh sees 19% surge in Grade A office space rents in H1: JLL

Riyadh sees 19% surge in Grade A office space rents in H1: JLL

RIYADH: Rents for Grade A office spaces in Riyadh reached SR2,090 ($556.43) per sq. meter annually in the first half of this year, a 19 percent increase from the same period in 2023. 

According to JLL, Riyadh added approximately 52,000 sq. meters of office space, bringing the total market supply to 5.2 million sq. meters. Grade A office spaces command a premium due to their prime location, infrastructure, and modern amenities. 

The rise in demand for high-quality office space in Riyadh aligns with Saudi Arabia’s ambition to position the capital as a global business and investment hub. 

“In the capital, we continue to see significant levels of demand from both government-related entities and the private sector, although the former still accounts for the majority of demand. From the private sector, we note that the average occupier space requirements have increased considerably over the course of the year,” stated JLL.  

It added: “Both of these cohorts are increasingly looking to occupy office developments in the north of Riyadh for a number of reasons, including but not limited to ease of access and egress the emergence of new, high-quality office options.”  

The real estate agency further noted that no new office supply had been added in Jeddah during the first half of this year, keeping the total stock stable at 1.21 million sq. meters. 

The report projected that approximately 249,000 sq. meters and 48,000 sq. meters of gross leasable area are expected to be delivered in Riyadh and Jeddah, respectively, in the second half of this year. 

“Despite considerable levels of new supply scheduled to be delivered over the course of the year, looking ahead, we expect that the trajectory of the market in the second half of the year will remain on a similar course to that seen in the first half of the year,” said JLL.  

The agency added that strong pre-leasing levels for upcoming institutional-quality developments, combined with a significant level of pent-up demand in the market — particularly from incumbents looking to upgrade their office space — will continue to underpin rental and occupancy growth in Riyadh and Jeddah. 

Earlier this month, another analysis by Knight Frank revealed that residential transaction values in Saudi Arabia surged 25 percent year on year in the third quarter of 2024, totaling SR35.4 billion. 

The Knight Frank report added that the volume of deals also increased by 12 percent, reaching 45,924 agreements, highlighting strong demand in the Kingdom’s housing market. 

This trend follows a continued increase in demand over the last several quarters as Saudi Arabia experiences growth in local and expatriate populations amid efforts to attract investment and advance diversification projects. 

Residential sector outlook 

According to the report, Riyadh witnessed the delivery of 16,200 units in the first half of this year, bringing the overall stock to 1.46 million units. 

Some 11,300 residential dwellings were delivered in Jeddah during the first six months, increasing the total to 891,000. 

“The residential sector in Riyadh and Jeddah recorded a robust start to the year, with a substantial increase in the number of delivered residential units. The surge in demand for residential units, driven by the younger generation’s preference for independent living arrangements, has prompted an innovation wave in housing design,” said JLL.  

The report highlighted that sale prices experienced a 10 percent year on year increase in June in Riyadh, while average rents witnessed an annual increase of 9 percent. 

In Jeddah, sale prices rose by 5 percent in the first half of this year compared to the same period in 2023, while average rents increased by 4 percent. 

The analysis added that the residential real estate sector in Saudi Arabia is also facing challenges, including rising land costs — particularly in Riyadh — volatile construction expenses influenced by global economic headwinds, capacity constraints in the local market, increasing shipping charges, and high financing costs. 

“As a result, we are seeing that in parts of the market, the scheduled delivery schedules are slipping, which in turn is impacting potential transactional activity as owner-occupiers and investors approach a wait-and-see approach,” said JLL.  

JLL added that both Riyadh and Jeddah will see the delivery of 16,000 residential units in the second half of this year. 

Retail market 

JLL stated that no major malls were completed in Riyadh during the first half of this year, with the total organized retail stock remaining stable at 3.48 million sq. meters. 

Jeddah, however, witnessed the completion of several zones at Souq 7, adding approximately 106,000 sq. meters of retail space and bringing the total supply to 2.16 million sq. meters. 

In the remaining part of the year, the capital and Jeddah are anticipated to receive an additional 77,000 sq. meters and 112,000 sq. meters of retail gross leasable area. 

“Our outlook for the retail sector in Saudi Arabia remains positive in the long-term, with the sector being supported by a broadening range of demand drivers, increasing retail expenditure, and the growth in the number of tourists,” said JLL.  

It added: “Riyadh, in particular, is striving to become a top global tourist destination, driving a greater emphasis on providing high-quality retail offerings. Shopping centers in the Kingdom are adapting to socio-economic changes by incorporating essential features such as cinemas, F&B (food and beverage) establishments, and entertainment facilities.”  

Hospitality sector 

JLL noted that Saudi Arabia’s hospitality sector demonstrated strong performance in the first half of this year, driven by the increased number and variety of entertainment facilities, the promotion of sports, and the introduction of new destination drivers. 

According to the report, the average occupancy rate among hotels in Saudi Arabia increased by one percentage point year-on-year in the first half of 2024, while the average daily rate increased by 7 percent, and revenue per available room also rose by 8 percent during the same period. 

“The outlook for the hospitality sector is positive, with the tourism industry set to be a major contributor to growth and diversification efforts,” said JLL.  

It concluded: “Planned investments of $800 billion over the next 10 years, along with a robust pipeline of flagship events such as the Asian Cup 2027, Formula 1 races, Asian Winter Games 2029, Expo 2030, and FIFA World Cup 2034, are expected to drive the sector’s long-term fundamentals.” 


Saudi delivery volumes surge to 101m in Q2 amid logistics push

Saudi delivery volumes surge to 101m in Q2 amid logistics push
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Saudi delivery volumes surge to 101m in Q2 amid logistics push

Saudi delivery volumes surge to 101m in Q2 amid logistics push

RIYADH: Saudi Arabia’s delivery sector processed more than 101 million orders in the second quarter of 2025, driven by surging e-commerce demand and ongoing investments in logistics infrastructure, official data showed. 

According to the latest report from the Transport General Authority, Riyadh accounted for 45.04 percent of the total delivery volume, followed by Makkah at 21.17 percent and the Eastern Province with 15.87 percent. 

Saudi Arabia’s delivery and rail sector expansion aligns closely with the National Transport and Logistics Strategy, which aims to position the Kingdom as a global logistics hub by 2030.  

Key NTLS goals include increasing the sector’s gross domestic product contribution to 10 percent, expanding rail networks to 8,080 km, boosting port throughput to 40 million Twenty-foot Equivalent Units annually, and enhancing air cargo capacity beyond 4.5 million tonnes.  

Other regions contributed smaller shares to the total delivery volume in the second quarter, including Al Madinah at 4.65 percent, Asir at 3.56 percent, and Al Qassim at 2.89 percent. 

Northern and less populated areas recorded modest volumes, with Al Baha at 0.21 percent, Northern Borders at 0.54 percent, Najran at 0.66 percent, and Al Jouf at 0.77 percent.  

This growth in delivery activity coincides with broader momentum in Saudi Arabia’s transport and logistics infrastructure. In the first half of 2025, Saudi Arabia Railways recorded over 7.9 million passengers across 21,205 passenger train trips, an 8 percent increase from the previous year.  

The rail network also supported the 1446 Hajj season, transporting over 4.3 million pilgrims via the Haramain High-Speed Railway and nearly 5.1 million pilgrims through the Mashaer Train network.  

On the freight side, SAR moved more than 14.9 million tonnes of cargo during the same period, marking a 13 percent year-on-year increase. 

These logistics gains were reinforced by Saudi Arabia’s active participation in key industry events and strategic partnerships with local and international firms.  

SAR’s involvement in major exhibitions and forums, alongside collaborations with companies such as STC, Lucid, Turkish Airlines, and SDAIA, underscores the Kingdom’s push to elevate transport capabilities and digital integration.  

Additionally, SAR’s recognition through ISO certifications and national quality awards reflects the growing emphasis on service excellence and governance in the sector. 

Supported by regulatory reforms, digital transformation, and infrastructure investment, the National Transport and Logistics Strategy aims to leverage Saudi Arabia’s strategic location to enhance multimodal connectivity and position the Kingdom among the world’s top ten in the Global Logistics Performance Index. 


Saudi real estate transactions hit $320bn

Saudi real estate transactions hit $320bn
Updated 25 min 49 sec ago
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Saudi real estate transactions hit $320bn

Saudi real estate transactions hit $320bn
  • System led to over 8 million real estate transactions
  • Shift driven by Vision 2030 and Real Estate Brokerage Law

RIYADH: Saudi Arabia’s real estate market recorded transactions worth around SR1.2 trillion ($319.8 billion) between July 2023 and July 2025, under the implementation of a new property initiative, according to a recent announcement. 

The figure was revealed by the General Real Estate Authority after the second edition of the Real Estate Brokerage Forum 2025, held at the Riyadh International Convention and Exhibition Center, the Saudi Press Agency reported. 

Saudi Arabia’s real estate sector is transforming under Vision 2030, which aims to raise homeownership to 70 percent by 2030, up from about 63.7 percent in 2023. The plan focuses on expanding mortgage lending, diversifying financing, and doubling mortgage activity through wider bank participation.

Tayseer Al-Mufarrej, general director of strategic communication and official spokesperson for the authority, highlighted the system’s impact during his keynote address, saying that it has led to over 8 million real estate transactions and the licensing of more than 86,000 brokers, alongside the approval of 75 digital platforms that host over 685,000 authorized listings. 

The shift is driven by Vision 2030 and the Real Estate Brokerage Law, introduced in 2022, which aims to professionalize property transactions through standardized contracts, broker licensing, and stricter oversight to boost transparency and protect consumers.

“Al-Mufarrej noted that the system had brought about a fundamental transformation in the structure of the sector by turning brokerage into a licensed profession governed by regulations and defined responsibilities and obligations,” SPA said. 

Within its first year, transactions rose by 17 percent, totaling SR605 billion in deals and prompting the licensing of tens of thousands of individual and corporate brokers, as well as digital platforms.

In the forum’s first panel discussion, titled Legislative Updates and Empowerment Opportunities in the Real Estate Brokerage System, speakers said that the sector now operates within an enabling regulatory framework that supports growth. 

They described the current environment as the most significant regulatory transformation in the sector’s history, aimed at boosting reliability and sustainability. 

A second panel discussion, titled “From Value Creation to Sustainable Sales,” addressed the ongoing urban development in the Kingdom.

Participants praised the governance measures and planning standards that have improved residential neighborhoods and elevated the quality of life. 

The forum, organized by the authority, is part of broader efforts to enhance the real estate business environment, supporting economic growth and aligning with the comprehensive national real estate strategy. 


Saudi fund extends $32m in loans to Bosnia for education, innovation projects

Saudi fund extends $32m in loans to Bosnia for education, innovation projects
Updated 22 July 2025
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Saudi fund extends $32m in loans to Bosnia for education, innovation projects

Saudi fund extends $32m in loans to Bosnia for education, innovation projects
  • $19 million allocated to build a science and technology park
  • $13 million issued to develop new student dormitory

JEDDAH: Social infrastructure in Bosnia and Herzegovina is set to improve following two Saudi-funded development loans worth $32 million, targeting science, technology, and higher education facilities. 

The Saudi Fund for Development has allocated $19 million for the construction of a Science and Technology Park, and $13 million for the development and outfitting of a new student dormitory at the Borisa Starovic Public Institution Student Center in Foca, in the country’s southeastern region. 

SFD CEO Sultan Al-Marshad signed the deals with Bosnia’s Minister of Finance and Treasury Srdan Amidzic, in the presence of Saudi Ambassador Osama bin Dakhil Al-Ahmadi, according to an official release. 

The new funding builds on nearly three decades of Saudi-Bosnian cooperation, during which the SFD has financed 27 projects through nine concessional loans totaling over $163 million, along with $53 million in grants supporting post-war reconstruction and long-term development. 

“The Science and Technology Park Project aims to establish a multidisciplinary scientific center covering a total area of approximately 200,000 square meters, supporting technological advancement, economic development, health care, and higher education,” the SFD said. 

“The center will serve as a collaborative hub for researchers, scientists, and entrepreneurs across various fields,” it added.

The student housing project is intended to strengthen the higher education sector by boosting student enrollment and providing improved accommodation to enhance learning opportunities and support broader community development. 

The agreements with Bosnia and Herzegovina come amid the SFD’s broader engagement in the Balkans. In October 2024, Serbia signed three loan agreements worth $205 million with the fund to support its agriculture, education, and energy sectors, underscoring Saudi Arabia’s growing development partnerships across Southeastern Europe. 

The SFD’s activity in Bosnia is part of a larger push across emerging economies. In a separate deal earlier this month, the fund signed a $30 million loan agreement with Tajikistan to finance the Kulob city ring road project. 

The project aims to enhance regional transit infrastructure by linking Central Asian countries with China and Indian Ocean markets via land routes. It includes the construction of a road and two bridges to improve traffic flow, road safety, and trade efficiency. 

An SFD delegation led by Al-Marshad also recently participated in the inauguration of the Wayamba University township development project in Sri Lanka

The $28 million initiative, located in the country’s northwestern province, includes new construction, classroom renovations, and modern educational equipment to strengthen the higher education sector. 


Middle East gas demand expected to rise by 3.5% in 2026: IEA

Middle East gas demand expected to rise by 3.5% in 2026: IEA
Updated 22 July 2025
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Middle East gas demand expected to rise by 3.5% in 2026: IEA

Middle East gas demand expected to rise by 3.5% in 2026: IEA

RIYADH: The combined gas demand in the Middle East and Africa region is expected to rise by 2 percent in 2025 before accelerating to 3.5 percent in 2026, driven by higher use in the industry and power sector, an analysis showed. 

In its latest report, the International Energy Agency projected that global gas consumption is projected to reach an all-time high in 2026, with demand growth accelerating to around 2 percent, up from the expected 1.3 percent expansion in 2025. 

In April, a report by the World Bank echoed similar views, stating that global gas consumption is expected to be moderate in 2025, before rebounding in 2026, due to high demand in markets such as the Asia Pacific and the Middle East. 

Commenting on the recent report, IEA Director of Energy Markets and Security Keisuke Sadamori said: “The backdrop for global gas markets is shifting as we enter the second half of this year and look toward 2026. The wave of LNG (liquefied natural gas) supply that is set to come online is poised to ease fundamentals and spur additional demand, especially in Asia.” 

Sadamori added that the IEA’s latest projection on gas demand and consumption is subject to unusually high levels of uncertainty over the global macroeconomic outlook and the volatile geopolitical environment. 

Natural gas is a significant source of energy for power generation, industrial processes, and heating. It is widely considered a cleaner-burning fuel than coal or oil as the world continues its energy transition journey.

The IEA further stated that Asia’s gas demand is expected to rise by more than 4 percent in 2026, accounting for around half of the global gas demand growth. 

In North America, natural gas demand is expected to increase by less than 1 percent next year, primarily supported by the power sector. 

The report, however, noted that gas demand in Europe is projected to decline by 2 percent next year, amid strong renewable energy output. 

With global gas consumption expected to reach an all-time high in 2026, usage by industry and the energy sector is forecast to contribute around half of the incremental demand. 

Gas-to-power demand is projected to account for 30 percent of the total demand growth in 2026, while gas use in the residential and commercial sectors is expected to increase by around 1 percent, assuming average weather conditions prevail.

Stable Middle East and energy security

According to the latest IEA report, stable geopolitical conditions in the Middle East region are critical to ensure global energy security. 

“The conflict between Israel and Iran highlighted the energy interdependencies within the Middle East and the region’s crucial role in global oil, natural gas and fertilizer supply security,” said the energy agency. 

It added: “The Middle East accounts for 30 percent of global oil and 18 percent of global gas production, almost 25 percent of LNG supplies and around one-third of global urea exports.” 

According to the study, the crisis in the Middle East region put intense upward pressure on prices, with the Israel-Iran conflict fueling strong price volatility across commodity markets. 

In the cases of natural gas and urea, higher prices were also supported by actual disruptions to production and physical trade flows. 

Due to rising security concerns, Israel shut natural gas production at the Leviathan and Karish fields between June 13 and 15 and halted piped gas exports to Egypt and Jordan, which in turn led to the curtailment of fertilizer production. 

In Iran, attacks damaged a platform at South Pars Phase 14, reducing output by around 12 million cubic meters per day. 

Production in gas fields and trade flows in the Middle East region were gradually restored following a ceasefire between Israel and Iran. 

“The initial increase in prices was largely driven by the fear that an escalation of the conflict could lead to the closure of the Strait of Hormuz — the world’s most critical oil and LNG chokepoint, which is located between Iran and Oman,” said IEA. 

Earlier this month, a report released by Rystad Energy, a research and analysis firm, stated that the Middle East region is on track to surpass Asia and become the world’s second-largest gas producer by 2025, ranking only behind North America. 

According to the analysis, gas production in the Middle East has increased by around 15 percent since 2020, and future growth underscores the determination of regional producers to monetize their gas reserves and develop export potential to meet global demand. 

The analysis added that Iran currently leads the Middle East in gas production, with about 25 billion cubic feet per day, followed by Qatar at 16 bcfd and Saudi Arabia at eight bcfd. 

LNG supply

According to the latest IEA report, global LNG supply in 2026 is projected to rise by 7 percent or 40 billion cubic meters, as new projects are expected to come online in countries including Qatar and the US. 

Qatar plans to expand its LNG production capacity from 77 million tonnes per annum to 110 mtpa by 2026 and 126 mtpa by 2027, ultimately reaching 142 mtpa by 2030.

In March, global credit rating agency Fitch said that state-owned Qatar Energy’s North Field projects will support both hydrocarbon and non-hydrocarbon growth from 2025 to 2030. 

North Field, which holds nearly 10 percent of the world’s known LNG reserves, lies off the northeast shore of the Qatar peninsula, covering more than 6,000 sq. km — roughly half the country’s land area. 

For the whole of 2025, global LNG supply is expected to increase by 5.5 percent or 30 bcm, primarily supported by the ramp-ups of major new LNG projects in North America.

These projects in North America include the Plaquemines LNG project and the Corpus Christi Stage 3 expansion, as well as LNG Canada.


Abu Dhabi Airports sees 13% rise in passenger numbers despite airspace disruptions

Abu Dhabi Airports sees 13% rise in passenger numbers despite airspace disruptions
Updated 22 July 2025
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Abu Dhabi Airports sees 13% rise in passenger numbers despite airspace disruptions

Abu Dhabi Airports sees 13% rise in passenger numbers despite airspace disruptions

JEDDAH: Abu Dhabi Airports handled more than 15.8 million passengers in the first half of 2025, up 13.1 percent from the previous six months, despite regional airspace disruptions. 

Zayed International Airport, the UAE’s second-largest air base and a key international hub connected to over 120 passenger destinations, played a central role in the surge. It recorded 15.5 million passengers by the end of June — a 13.2 percent year-on-year increase, according to the UAE’s official news agency WAM. 

The government-owned operator showed resilience, maintaining steady growth in both passenger traffic and flight movements despite regional disruptions caused by a 12-day conflict between Israel and Iran. The unrest led to airspace closures across the Gulf, including the UAE, resulting in flight suspensions and rerouting. 

Elena Sorlini, managing director and CEO at Abu Dhabi Airports, said: “Consistently delivering positive growth for the past 17 quarters is testament to the dedication and collective effort of the entire Abu Dhabi Airports team.” 

She added: “It reflects our operational agility and commitment to delivering an exceptional aviation experience and attracting international investors.” 

This increase in passenger traffic was accompanied by 133,533 total flights across the five airports in the first half of 2025, marking a 9.2 percent rise compared to the same period last year, according to the WAM report. 

Zayed International Airport recorded 93,858 aircraft movements during the first half, up 11.4 percent from 84,286 flights in the first six months of 2024. 

Etihad Airways temporarily halted some regional flights amid the tensions. Meanwhile, Wizz Air recently announced plans to exit Abu Dhabi from Sept. 1, citing geopolitical instability and airspace restrictions. 

Abu Dhabi Airports pushed ahead with network expansion, introducing 16 new destinations and onboarding several new airline partners in the first half of the year. 

These include China Eastern Airlines’ four-times-weekly Shanghai service, which will become daily in September; Air Seychelles’ six weekly flights; and Fly Cham’s route to Damascus. 

Indian carrier IndiGo also added new services to Madurai, Bhubaneswar, and Visakhapatnam, making Zayed International its most connected hub in the UAE. 

Cargo volumes also rose, reaching 344,795 tonnes in the first half of the year, supported by infrastructure upgrades and growing trade flows through the emirate.