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 credit card lending surges to $8.4bn amid digital payments boom 

Saudi credit card lending surges to $8.4bn amid digital payments boom 
Updated 13 sec ago
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Saudi credit card lending surges to $8.4bn amid digital payments boom 

Saudi credit card lending surges to $8.4bn amid digital payments boom 

RIYADH: Credit card lending in Saudi Arabia soared to an all-time high of SR31.37 billion ($8.4 billion) in 2024, reflecting a 16 percent annual increase as the Kingdom accelerates its shift toward digital payments. 

The latest data from the Saudi Central Bank, also known as SAMA, shows that credit card lending now accounts for 6.66 percent of total consumer financing, more than doubling over the past six years. 

The steady rise aligns with Vision 2030’s push for digital payments and reduced cash transactions, reinforcing the Kingdom’s shift toward a modern, cashless financial ecosystem. 

SAMA data also showed total consumer loans reached SR471 billion in 2024, up 6.6 percent year on year. This excludes real estate financing, finance leasing, and margin lending. 

Among lending categories, education financing saw the highest growth, surging 9.6 percent to SR8.17 billion. Tourism and travel loans followed, rising 8.1 percent to SR992 million, while borrowing for furniture and durable goods increased 7.97 percent to SR8.52 billion. 

Vehicle and private transportation loans remained the largest identified segment, accounting for 2.5 percent of total consumer loans at SR11.71 billion. Notably, 91.8 percent of consumer loans fell under the category of “Others.” 

Consumer loans typically feature fixed repayment schedules and lower interest rates, often used for major expenses such as vehicle purchases and education. 

In contrast, credit card lending operates as a revolving credit facility, allowing borrowers to access funds up to a set limit, with repayments at variable interest rates based on usage. 

While credit card lending remains significantly lower than overall consumer loans, its rapid expansion is driven by several key factors. 

One major catalyst is the increasing availability of Shariah-compliant credit card products. As a predominantly Islamic banking market, Saudi Arabia has seen rising demand for financial solutions that align with religious principles, making credit cards more attractive to a wider consumer base. 

Banks have also introduced flexible payment solutions to cater to customer needs, including the Flexi credit card — launched by the Saudi National Bank in partnership with Mastercard — that lets users split payments into four interest-free installments, enhancing financial flexibility. 

Promotional incentives have further fueled growth, with banks offering rewards programs, cashback offers, travel discounts, and zero-fee installment plans. American Express Saudi Arabia, for example, provides exclusive benefits on hotel stays and dining, encouraging frequent card usage. 

The Kingdom’s rapid transition to a cashless economy has also played a crucial role. Government initiatives promoting digital transactions have increased consumer reliance on electronic payments, while the expansion of contactless payment technology has enhanced convenience and security, strengthening trust in digital financial services. 

Technological advancements, including secure mobile banking solutions and digital wallets, have further boosted the appeal of credit cards. 

As financial institutions continue innovating and the government sustains its digital transformation drive, Saudi Arabia’s credit card market is poised for continued growth, cementing its role in the Kingdom’s evolving financial landscape. 


Oil Updates — crude eases after report of rising US inventories

Oil Updates — crude eases after report of rising US inventories
Updated 41 min 18 sec ago
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Oil Updates — crude eases after report of rising US inventories

Oil Updates — crude eases after report of rising US inventories

LONDON: Oil prices edged lower on Thursday after an industry report showing a build in US crude stockpiles weighed on sentiment, falling back from gains made in the previous session on worries over supply disruptions in Russia.

Brent futures were down 17 cents at $75.87 a barrel by 9:00 a.m. Saudi time. US West Texas Intermediate crude dropped 30 cents to $71.95. The March contract expires on Thursday and the more active April contract eased 22 cents to $71.88.

Oil prices, which held near a one-week high on Wednesday, were on track to snap a three-session winning streak on Thursday.

US crude stocks rose by 3.34 million barrels last week, market sources said, citing American Petroleum Institute figures, on Wednesday.

Official oil inventory data from the US Energy Information Administration is due on Thursday. Both reports were delayed a day by a US holiday on Monday.

Analysts have forecast that about 2.2 million barrels of crude were added to US stockpiles in the week ended on Feb.14. If the forecasts are correct, energy firms would have added crude into storage for four weeks in a row for the first time since April 2024.

Import tariffs announced by the Trump administration could also dent oil prices by raising the cost of consumer goods, analysts said, weakening the global economy and reducing fuel demand. Concerns about European and Chinese demand were also helping keep prices in check.

“It is natural to be concerned about the global economic outlook as Donald Trump takes a sledgehammer smashing away at the existing global ‘free-trade structure’ with signals of 25 percent tariffs on car imports to the US,” said Bjarne Schieldrop, chief analyst commodities at SEB.

Separately, Russia said Caspian Pipeline Consortium oil flows, a major route for crude exports from Kazakhstan, were reduced by 30 percent-40 percent on Tuesday after a Ukraine drone attack on a pumping station. A 30 percent cut would equate to the loss of 380,000 barrels per day of market supply, Reuters calculations show.

However, other factors and potential boosts to oil supply added to concerns about prices.

In the Middle East, Israel and Hamas will begin indirect negotiations on a second stage of the Gaza ceasefire deal, which could weigh on oil prices by reducing the risk of further supply disruption.

Potential restarts of oil flows from Iraq’s Kurdistan region were offsetting supply risks, analysts at ING said.

“There’s talk that these flows could resume soon, after being offline since early 2023. A resumption could bring 300,000 barrels of supply per day onto the market,” ING analysts said in a note on Thursday.


Pakistan’s finmin calls for technical support in meeting with World Bank delegation

Pakistan’s finmin calls for technical support in meeting with World Bank delegation
Updated 19 February 2025
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Pakistan’s finmin calls for technical support in meeting with World Bank delegation

Pakistan’s finmin calls for technical support in meeting with World Bank delegation
  • World Bank delegation arrived in Pakistan this week to discuss country’s economic projects and investments 
  • Muhammad Aurangzeb informs delegation of Pakistan’s economic gains and reforms agenda, says Finance Division 

KARACHI: Pakistan’s Finance Minister Muhammad Aurangzeb on Wednesday told a World Bank delegation that the country has enough financial assistance, stressing that it requires technical support and expertise to make the most of it. 
A delegation of nine executive directors of the World Bank arrived in Pakistan this week to discuss the country’s economic projects and investments, meeting Prime Minister Shehbaz Sharif on Monday.
The World Bank last month announced it would provide Pakistan with $20 billion in loans over the next decade. These loans are expected to be invested in nutrition, education and renewable energies in the hope of stimulating private-sector growth in the country. 
“We have enough financial support and assistance; what we truly need now is the expertise and technical support to make the most of them,” Aurangzeb was quoted by Pakistan’s Finance Division as saying in a statement. 
Aurangzeb appreciated the international institution’s support for Pakistan’s economic growth and development agenda. He outlined the government’s structural reforms, focusing on revenue mobilization, energy sector reforms, restructuring of state-owned enterprises and privatization efforts. 
“He emphasized the government’s focus on fiscal discipline through expenditure control and broadening the tax base, highlighting ongoing rightsizing efforts and projected revenue growth,” the Finance Division said. 
The minister reaffirmed Pakistan’s commitment to privatize loss-making public assets, saying that Islamabad was committed to ensuring a business-friendly environment where the private sector takes the lead in driving economic growth.
The Finance Division said that the delegation appreciated Pakistan’s reform agenda, noting that key economic measures were already yielding visible results. 
“Your government has been successful in touching every important aspect of the economy, and things seem to be achievable now if you stay the course,” the delegation said, as per the Finance Division.  
The World Bank officials also reaffirmed the institution’s commitment to continuing its collaboration with Pakistan, supporting priority sectors and providing the necessary technical expertise to help the country navigate economic challenges, the Finance Division said. 
Cash-strapped Pakistan has long suffered from a macroeconomic crisis, which caused it to come to the brink of a sovereign default in 2023. The International Monetary Fund (IMF) rescued Islamabad by agreeing to a last-gasp $3 billion bailout in 2023.
Last year, Islamabad secured a new $7 billion loan deal from the IMF. Since then, the country’s economy has started improving with weekly inflation coming down from 27 percent in 2023 to 1.8 percent in January year-on-year.


Saudi Arabia’s Al-Ahsa records 500% growth in local, international tourists in 2024

Saudi Arabia’s Al-Ahsa records 500% growth in local, international tourists in 2024
Updated 19 February 2025
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Saudi Arabia’s Al-Ahsa records 500% growth in local, international tourists in 2024

Saudi Arabia’s Al-Ahsa records 500% growth in local, international tourists in 2024

RIYADH: Saudi Arabia’s Al-Ahsa region saw a 500 percent surge in tourists, surpassing 3.2 million in 2024 compared to 2019, the Kingdom’s tourism minister said.

In a speech at the Al-Ahsa Forum 2025, held from Feb. 19-20, Ahmed Al-Khateeb shared that total tourist spending last year surpassed SR3.3 billion ($897 million), with a growth rate estimated at about 400 percent compared to 2019, the Saudi Press Agency reported.

This falls in line with the ministry’s continued efforts to enable investment and qualify national cadres to enhance Al-Ahsa’s position as a prominent tourist destination in Saudi Arabia, the minister highlighted.

The growth also aligns with the qualitative shift in the regional hospitality sector. The number of licensed tourism facilities in the governorate grew by 52 percent compared to 2023, while the total number of licensed rooms reached 2,700 by the end of last year.

During his speech, Al-Khateeb also underlined the efforts made by the tourism sector, indicating that the Tourism Development Fund has financed several qualitative projects in the governorate, most notably the five-star “Hilton Al-Ahsa” hotel, “Radisson Blu” and “Hilton Garden Inn.”

He said the Ministry of Tourism has implemented several initiatives and various exemptions as well as incentive programs aimed at further elevating the investment environment in Al-Ahsa and that several projects have benefited from them, with a total value of SR3 billion in the governorate.

Al-Khateeb added that the ministry has provided more than 5,300 training prospects for national cadres in the governorate from 2023 until today, exceeding 50 percent of the target of training opportunities allocated by the ministry for the region, which was announced in the previous version of the forum.

He also said that the entity will continue working to qualify national cadres by providing the largest possible number of training opportunities for locals.

During a meeting with investors and entrepreneurs as part of his broader tour across Saudi regions in November, Al-Khateeb said that the Kingdom committed over SR3.5 billion to develop 17 tourism projects in Al-Ahsa, positioning the region as a key destination in the nation’s growing travel sector. 

At the time, the minister outlined plans to enhance the governorate’s tourism infrastructure while noting that the projects would add more than 1,800 hotel rooms, thereby leveraging Al-Ahsa’s natural and cultural assets to attract domestic and international visitors.


Saudi Arabia’s NDMC eyes green bond issuances in 2025

Saudi Arabia’s NDMC eyes green bond issuances in 2025
Updated 19 February 2025
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Saudi Arabia’s NDMC eyes green bond issuances in 2025

Saudi Arabia’s NDMC eyes green bond issuances in 2025

RIYADH: Saudi Arabia’s National Debt Management Center is considering issuing green bonds in international markets after finalizing its green framework in 2024, a senior official said.

At the Capital Markets & the Kingdom of Saudi Arabia event, Muhannad Mufti, chief of portfolio management at NDMC, highlighted that the Kingdom has introduced key debt programs to ensure sustainable access to capital markets and strengthen the yield curve.

Mufti explained: “The NDMC launched the GMT program in 2016, which focused on international issuances. We also introduced a local sukuk program to help with price discovery and expand the yield curve, with maturities ranging from 7 to 30 years. Additionally, we launched the international sukuk program.”

He added, “In 2024, we finalized the green framework, and throughout this year, we are exploring opportunities to issue in the green market.”

Debt market evolution

Saudi Arabia's debt market has seen significant growth, with experts noting a surge in investor interest in debt instruments amid rising interest rates.

Mohammed Al-Bensaleh, head of debt financing at Al Rajhi Capital, emphasized the local debt capital market’s expansion, which has consistently outpaced the equity market in recent years.

“The local debt capital market has historically been larger than the equity market. Some corporates initially issued in the local capital market but later shifted focus to other funding sources for reasons such as process, currency requirements, cost, or flexibility,” Al-Bensaleh explained.

He pointed out that despite liquidity pressures, the loan market remains significantly larger than the capital market, creating opportunities for issuers.

“Especially in the current environment, we’re seeing more investors focusing on debt instruments as an investment avenue, which wasn’t the case just three years ago when interest rates were very low,” he added.

Mohammad Al-Faadhel, assistant deputy of financing at the Capital Market Authority, discussed the structured evolution of Saudi Arabia’s financing landscape and how the debt capital market is poised for further acceleration, especially following Vision 2030 reforms.

“I want to take a step back and look at how financing evolves. Typically, in other markets, it starts with bank loans, progresses to the equity market, then to bond markets, and eventually more complex instruments like derivatives and structured products,” Al-Faadhel said.

He highlighted the influence of Vision 2030 in transforming the Kingdom from a capital exporter to a market where credit outpaces deposits, creating an ideal environment for the debt market to grow.

“We haven’t left this to chance. Together with other stakeholders, we’ve proactively established the Sukuk and Development Capital Market Committee to remove obstacles and support the market’s growth,” he concluded.

Key challenges and future outlook

While Saudi Arabia’s debt market is rapidly maturing, several challenges remain. Al-Bensaleh highlighted three key obstacles: liquidity for government sukuk, expanding corporate debt issuances, and introducing securitization.

“To address liquidity for government sukuk, we’ve implemented several measures, including the introduction of a market-making framework by the exchange in January, the launch of the omnibus account structure in November, and the near completion of licensing an alternative trading system,” he explained.

On the corporate side, efforts are underway to simplify listing requirements and encourage broader participation.

“We’ve reduced some requirements by 50 percent without compromising investment protection. As a result, we’ve seen increased activity and expect a strong pipeline of approvals in 2025,” Al-Bensaleh added.

The push toward green and sustainable finance is another critical area, with regulatory bodies set to introduce new guidelines for green, social, and sustainability-linked bonds by the end of March.

Looking ahead, Al-Faadhel outlined the Kingdom’s ambitions for the debt market, aiming to increase the debt-to-bank loan ratio from the current 11 percent debt-to-89 percent bank loan split to the mid-20s within five years, and closer to G20 averages in the next decade.

“Currently, the split between bank loans and the debt capital market is far below G20 levels. In five years, we aim to move from 11 percent to the mid-20s, and hopefully, within 10 years, align closer with G20 averages. That’s our goal,” he concluded.

With strategic reforms, growing investor interest, and proactive regulatory bodies, Saudi Arabia’s debt market is set for substantial growth, positioning the Kingdom as a key player in regional and global capital markets.