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Saudi Arabia Commercial Real Estate Market

Saudi Arabia Commercial Real Estate Market

Saudi Arabia Commercial Real Estate Market, By Type (Office Spaces, Retail Spaces, Industrial & Logistics, Hospitality, Others (Healthcare Facilities (Hospitals, Clinics), Educational Institutions)); By End User (Corporate, Government, Retailers, Industrial & Logistics Companies, Hospitality Providers, Other Buyers), Trend Analysis, Competitive Landscape & Forecast, 2019–2030

  • Published Date: September 2024
  • Report ID: BWC24714
  • Available Format: PDF
  • Page: 115

Report Overview

The Saudi Government’s support and initiatives for large infrastructure development projects and economic diversification are expected to drive Saudi Arabia Commercial Real Estate Market during the forecast period between 2024 and 2030.

Saudi Arabia Commercial Real Estate Market – Industry Trends & Forecast Report, 2030

Saudi Arabia Commercial Real Estate Market size was estimated at USD 21.05 billion in 2023. During the forecast period between 2024 and 2030, Saudi Arabia Commercial Real Estate Market size is projected to grow at a CAGR of 8.48% reaching a value of USD 37.21 billion by 2030. Prominent drivers of the market include the government’s continued investment in giga-projects and expanding the entertainment sector, which are set to boost demand for commercial real estate. Vision 2030 initiatives, such as international tourist e-visas, are further enhancing the country's competitiveness, positively impacting real estate growth. The hospitality sector is leading in development, while corporate demand in the office market is expected to recover as business conditions improve, bolstered by major projects like Riyadh's metro and King Salman Energy Park. Additionally, the expansion of King Abdulaziz International Airport is expected to fuel real estate growth, particularly in Riyadh.

Saudi Arabia Commercial Real Estate Market

Commercial Real Estate – Overview

Commercial real estate refers to properties primarily used for business purposes, such as offices, retail spaces, industrial facilities, hotels, and multifamily housing. It encompasses income-generating properties where businesses operate, including shopping malls, warehouses, and medical centers. Commercial real estate is distinct from residential properties, as it focuses on providing spaces for commercial activities rather than living spaces. Investors in commercial real estate typically earn income through leasing spaces to businesses or selling the properties for a profit. The value of commercial real estate is influenced by factors like location, market demand, economic conditions, and property management.

Saudi Arabia Commercial Real Estate Market

Growth Drivers

Heightened Focus on Economic Diversification

Economic diversification is a key growth driver for Saudi Arabia Commercial Real Estate Market, with the country's Vision 2030 plan at the forefront of these developments. The government's focus on diversifying the economy away from oil has led to significant investments in urban development, infrastructure, and real estate, creating a dynamic environment for commercial properties such as office spaces, retail establishments, and industrial complexes. As Saudi Arabia continues to enhance its business-friendly environment, the demand for strategically located commercial properties is increasing, driven by technology integration, sustainable development, and changing tenant preferences. The rise of smart buildings, flexible office spaces, and sustainable commercial properties reflects global trends toward digital transformation and environmental responsibility. The e-commerce boom is reshaping retail spaces, while major urban development projects further highlight the importance of location and accessibility. With government support and a robust regulatory framework ensuring market transparency, investors are exploring opportunities to diversify portfolios and leverage long-term economic growth. Strategic partnerships, joint ventures, and innovative financing options are also contributing to the expansion of the sector, while risk mitigation remains a priority due to market volatility and geopolitical uncertainties. As Saudi Arabia positions itself as a major commercial real estate hub, the country's ongoing commitment to sustainability, technology, and economic diversification will continue to attract investors seeking long-term returns.

Challenges

Economic Uncertainties across the Globe

Global economic uncertainties, including fluctuating oil prices, rising inflation, and geopolitical tensions, are restraining the growth of Saudi Arabia Commercial Real Estate Market. As oil revenues remain a critical component of the Kingdom's economy, any volatility in global markets significantly impacts government spending and investment in commercial real estate projects. Additionally, tightening global liquidity and investor hesitancy are delaying large-scale developments. These challenges are compounded by the country's economic reforms, which, while ambitious, create uncertainty and slow down progress in key real estate sectors, hindering growth in the commercial property market.

Impact of Escalating Geopolitical Tensions on Saudi Arabia Commercial Real Estate Market

Escalating geopolitical tensions among countries across regions could have a significant impact on the growth of the Saudi Arabia Commercial Real Estate Market. Political instabilities and conflicts can disrupt investor confidence, delay international partnerships, and increase the cost of materials and construction. Sanctions or trade restrictions further compound these challenges by limiting access to essential resources and foreign capital. Additionally, heightened regional tensions could shift government focus and spending away from real estate projects toward defense or crisis management. Such uncertainties can stall ongoing developments and create a volatile environment, hampering the overall growth of the commercial real estate sector.

Saudi Arabia Commercial Real Estate Market

Segmental Coverage

Saudi Arabia Commercial Real Estate Market – By Type

On the basis of type, Saudi Arabia Commercial Real Estate Market is divided into Office Spaces, Retail Spaces, Industrial and Logistics, Hospitality, Others (including Healthcare Facilities (Hospitals, Clinics) and Educational Institutions) segments. The retail spaces segment holds the largest share of Saudi Arabia Commercial Real Estate Market by type. Retail real estate in cities like Riyadh is experiencing rapid transformation, with diverse outlets ranging from luxury brands to fast-food restaurants. The easing of government restrictions on restaurants, cafes, and cinemas has driven higher footfall in retail destinations. As e-commerce grows, shopping centers are enhancing customer experiences by improving entertainment and food and beverage offerings. Riyadh’s retail Gross Leasable Area (GLA) reached 3.3 million sq.m. in Q3 2022, with developments like Lumiere Centre leading the market. High-quality retail centers are driving growth, attracting a broad consumer base. Meanwhile, the office spaces segment is expected to witness the fastest growth rate during the forecast period. Grade A office spaces, known for their prime locations and superior infrastructure, have reached an impressive 98% occupancy, while Grade B spaces stand at 75%, the highest in five years. In Jeddah, Grade A offices are 92% occupied, with rents increasing by 6.5% to USD 283 per square meter. Future developments like Jeddah Gate, offering 230,000 sq.m. of high-quality office space, are expected to further drive demand. Economic reforms under Vision 2030 and large-scale urban regeneration projects will likely accelerate office sector growth.

Saudi Arabia Commercial Real Estate Market Growth

Saudi Arabia Commercial Real Estate Market – By End User

Based on end user, Saudi Arabia Commercial Real Estate Market is divided into Corporate, Government, Retailers, Industrial and Logistics Companies, Hospitality Providers, and other Buyers segments.

Competitive Landscape

Major players operating in Saudi Arabia Commercial Real Estate Market include Dar Al Arkan Real Estate, Jenan Real Estate Company, SEDCO Development, Jabal Omar Development, Abdul Latif Jameel, JLL Riyadh, Century 21 Saudi Arabia, and Emaar Properties. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

  • In July 2024 - Dorar Tammam Contracting Company (DTC) a leading company in Saudi Arabia's commercial real estate sector, was recognized for its portfolio of projects, including Atyaf Avenue Mall, Curvature Mall, and Ajlan Commercial Tower.

Scope of the Report

Attributes

Details

Years Considered

Historical Data – 2019–2030

Base Year – 2023

Estimated Year – 2024

Forecast Period – 2024–2030

Facts Covered

USD Billion

Market Coverage

Saudi Arabia 

Product/ Service Segmentation

Type, End User

Key Players

Dar Al Arkan Real Estate, Jenan Real Estate Company, SEDCO Development, Jabal Omar Development, Abdul Latif Jameel, JLL Riyadh, Century 21 Saudi Arabia, Emaar Properties

 

By Type

  • Office Spaces

  • Retail Spaces

  • Industrial & Logistics

  • Hospitality

  • Others (including Healthcare Facilities (Hospitals, Clinics), Educational Institutions)

By End User

  • Corporate

  • Government

  • Retailers

  • Industrial & Logistics Companies

  • Hospitality Providers

  1. Research Framework
    1. Research Objective
    2. Product Overview
    3. Market Segmentation
  2. Executive Summary
  3. Saudi Arabia Commercial Real Estate Market Insights
    1. Industry Value Chain Analysis
    2. DROC Analysis
      1. Growth Drivers
        1. Increasing Government Support
        2. Rising Number of Infrastructure Development
        3. Economic Diversification
      2. Restraints
        1. Global Economic Uncertainties
      3. Opportunities
        1. Thriving Tourism and Hospitality Sector
        2. Retail Expansion
      4. Challenges
        1. Changing Regulatory Environment
        2. Oversupply Concerns
    3. Technological Advancements/Recent Developments
    4. Regulatory Framework
    5. Porter’s Five Forces Analysis
      1. Bargaining Power of Suppliers
      2. Bargaining Power of Buyers
      3. Threat of New Entrants
      4. Threat of Substitutes
      5. Intensity of Rivalry
  4. Saudi Arabia Commercial Real Estate Market: Marketing Strategies
  5. Saudi Arabia Commercial Real Estate Market: Pricing Analysis
  6. Saudi Arabia Commercial Real Estate Market Overview
    1. Market Size & Forecast, 2019–2030
      1. By Value (USD Million)
    2. Market Share & Forecast
      1. By Type
        1. Office Spaces
        2. Retail Spaces
        3. Industrial & Logistics
        4. Hospitality
        5. Others (including Healthcare Facilities (Hospitals, Clinics), Educational Institutions)
      2. By End User
        1. Corporate
        2. Government
        3. Retailers
        4. Industrial & Logistics Companies
        5. Hospitality Providers
        6. Other Buyers
  7. Competitive Landscape
    1. List of Key Players and Their Products
    2. Saudi Arabia Commercial Real Estate Company Market Share Analysis, 2023
    3. Competitive Benchmarking, By Operating Parameters
    4. Key Strategic Development (Merger, Acquisition, Partnership)
  8. Impact of Escalating Geopolitical Tensions on Saudi Arabia Commercial Real Estate Market
  9. Company Profiles (Company Overview, Financial Matrix, Competitive landscape, Key Personnel, Key Competitors, Contact Address, and Strategic Outlook, and SWOT Analysis)
    1. Dar Al Arkan Real Estate
    2. Jenan Real Estate Company
    3. SEDCO Development
    4. Jabal Omar Development
    5. Abdul Latif Jameel
    6. JLL Riyadh
    7. Century 21 Saudi Arabi
    8. Emaar Properties
    9. Other prominent players
  10. Key Strategic Recommendations
  11. Research Methodology
    1. Qualitative Research
      1.  Primary & Secondary Research
    2.    Quantitative Research
    3.    Market Breakdown & Data Triangulation
      1.  Secondary Research
      2.  Primary Research
    4.    Breakdown of Primary Research Respondents
    5.    Assumptions & Limitations

*Financial information of non-listed companies can be provided as per availability.

**The segmentation and the companies are subject to modifications based on in-depth secondary research for the final deliverable.

 

List of Figures

 

Figure 1       Saudi Arabia Commercial Real Estate Segmentation

Figure 2       Saudi Arabia Commercial Real Estate Market Value Chain Analysis

Figure 3       Company Market Share Analysis, 2023

Figure 4       Saudi Arabia Commercial Real Estate Market Size, By Value (USD Million), 2019–2030

Figure 5       Saudi Arabia Commercial Real Estate Market Share, By Type, By Value (USD Million), 2019–2030

Figure 6       Saudi Arabia Commercial Real Estate Market Share, By End User, By Value (USD Million), 2019–2030

         

List of Tables      

 

Table 1        Saudi Arabia Commercial Real Estate Market Size, By Value (USD Million), 2019–2030

Table 2        Saudi Arabia Commercial Real Estate Market Share, By Type, By Value (USD Million), 2019–2030

Table 3        Saudi Arabia Commercial Real Estate Market Share, By End User, By Value (USD Million), 2019–2030

Table 4        Dar Al Arkan Real Estate Company Overview

Table 5        Dar Al Arkan Real Estate Financial Overview

Table 6        Jenan Real Estate Company: Company Overview

Table 7        Jenan Real Estate Company Financial Overview

Table 8        SEDCO Development Company Overview

Table 9        SEDCO Development Financial Overview

Table 10      Jabal Omar Development Company Overview

Table 11      Jabal Omar Development Financial Overview

Table 12      Abdul Latif Jameel Company Overview

Table 13      Abdul Latif Jameel Financial Overview

Table 14      JLL Riyadh Company Overview

Table 15      JLL Riyadh Financial Overview

Table 16      Century 21 Saudi Arabi Company Overview

Table 17      Century 21 Saudi Arabiaz Financial Overview

Table 18      Emaar Properties Company Overview

Table 19      Emaar Properties Financial Overview

Market Segmentation

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No data available

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Frequently Asked Questions (FAQs):

Ans: Saudi Arabia Commercial Real Estate Market size by value was estimated at USD 21.05 billion in 2023.
Ans: Saudi Arabia Commercial Real Estate Market is expected to grow at CAGRs of 8.48% during the forecast period between 2024 and 2030.
Ans: By 2030, Saudi Arabia Commercial Real Estate Market size is forecast to reach a value of USD 37.21 billion.
Ans: The growth of Saudi Arabia Commercial Real Estate Market is primarily driven by an increasing government support, rising number of infrastructure development, and economic diversification.
Ans: Key players in Saudi Arabia Commercial Real Estate Market include Dar Al Arkan Real Estate, Jenan Real Estate Company, SEDCO Development, Jabal Omar Development, Abdul Latif Jameel, JLL Riyadh, Century 21 Saudi Arabia, and Emaar Properties.
Ans: The office spaces segment is expected to grow at the fastest CAGR in Saudi Arabia Commercial Real Estate Market by type during the forecast period between 2024 and 2030.