Saudi Arabia Real Estate Market Review Q4 2024

Key Takeaways:

1. Riyadh's office demand remained buoyant through Q4 2024, driving an 18% increase in rents year-on-year as available office supply remains limited. The thriving non-oil economy and sustained interest from global occupiers to set up operations in the capital, continues to fuel leasing activity with supply constraints expected to persist.
2. The residential sector experienced notable growth through 2024, with rising property values, increased mortgage activity, and various new project launches. This has included an increasing number of new branded residences projects, as developers look to tap into the growing volume of international investments moving into the market.
3. Retail sales reached nearly SAR670 billion in 2024, reflecting the positive demographic story amidst a rising population. However, with multiple major shopping centers and mixed-use developments under construction and set for delivery in the coming 24 months, the retail landscape could start to see a gradual shift in market dynamics in favor of tenants.
4. The tourism sector saw significant growth in visitors during the year, with 30 million inbound tourists registered. However, the impact of new supply has generally seen occupancy rates across the country soften. However, dynamics in key business and event-focused markets like Riyadh have been much stronger, with solid growth in ADR’s and RevPAR recorded against 2023.
5. MODON's Q4 2024 investments and private sector partnerships are helping to drive the country’s industrial expansion, leading to rising industrial rents, with continued government support for infrastructure and domestic manufacturing encouraging investment activities.