According to JLL’s latest KSA Real Estate Market Dynamics report, Saudi Arabia’s real estate market continues growing due to major infrastructure investments and Saudi giga projects.
In the first half of 2024, 27,500 new residential units were delivered in Riyadh and Jeddah, with prices rising by up to 10% year on year in Riyadh and 9% in Jeddah, and rents grew by 4% yearly in Dammam.
Additionally, the hospitality and tourism sector saw massive growth due to increased tourism initiatives, supporting the Saudi Vision 2030 goals.
Saudi’s Real Estate Market Upward Trend
Saudi Arabia’s real estate market’s remarkable performance in the first half of 2024 is a testament to the Kingdom’s unwavering commitment to economic diversification and sustainable growth.
The residential and hospitality sectors have emerged as driving forces, propelled by strategic initiatives and substantial investments in infrastructure and giga projects.
- The delivery of 27,500 new residential units in Riyadh and Jeddah, coupled with rising property prices and rental rates, underscores the robust demand for housing in the Kingdom.
- The hospitality industry has witnessed impressive growth, fueled by the introduction of tourist visas, the expansion of entertainment offerings, and the promotion of sports and new experiences, positioning Saudi Arabia as a global leisure destination.
- The office market remains competitive, with landlords driving rental negotiations and new entrants establishing their presence while existing tenants expand or upgrade their spaces.
- The retail sector adapts to evolving consumer preferences, embracing experiential offerings and integrating cinemas, food and beverage establishments, and entertainment facilities.
Residential Sector Growth
The residential sector has witnessed a remarkable surge in activity, with the delivery of 27,500 new units in Riyadh and Jeddah during the first half of 2024.
This significant addition to the housing stock has catered to the growing demand for residential properties and supports the government’s efforts to boost homeownership among Saudi citizens. The positive impact of these initiatives is reflected in the yearly increases in sale prices and rental rates across the major cities.
In Riyadh, sale prices surged by 10%, while average rents grew by an impressive 9%. Jeddah, too, experienced a similar upward trajectory, with sale prices rising by 5% and rents increasing by 4% year-on-year.
Despite the challenges posed by rising construction costs and other factors, the residential market’s resilience and continued growth trajectory are a testament to the Kingdom’s commitment to meeting the housing needs of its citizens and fostering a thriving real estate ecosystem.
Hospitality Sector Demand
The hospitality sector has emerged as a key beneficiary of Saudi Arabia’s efforts to position itself as a global tourism destination. Introducing tourist visas, expanding entertainment offerings, and promoting sports and new experiences have contributed to the sector’s impressive growth in the first half of 2024.
Year-on-year, the Kingdom’s average occupancy rate increased by one percentage point. In contrast, its average daily rate (ADR) rose by 7%, resulting in an 8% increase in revenue per available room (RevPAR).
This positive trend was particularly pronounced in the Holy Cities of Makkah and Madinah, where RevPARs increased by 4% and 15%, respectively.
Riyadh, the capital city, has also witnessed a surge in corporate visitation, driven by the increasing number of corporate events hosted in the city. This influx of business travelers has contributed to a remarkable 25% increase in ADR, further bolstering the hospitality sector’s performance.
The tourism industry’s pivotal role in Saudi Arabia’s economic diversification efforts, with planned investments of $800 billion over the next decade and a robust pipeline of flagship events, cements a positive outlook for the hospitality sector.
The newly introduced star rating system also addresses short-term quality challenges and supports long-term market improvement, ensuring the Kingdom’s hospitality offerings remain globally competitive.
Office Market Shifting Trends
Saudi Arabia’s office market remains highly competitive, with landlords driving rental negotiations and new entrants establishing their presence in the Kingdom. Simultaneously, existing tenants are actively expanding or upgrading their office spaces, contributing to the market’s dynamism.
In the first half of 2024, Riyadh witnessed the addition of approximately 52,000 square meters of office space, bringing the total existing supply to 5.2 million square meters.
On the other hand, Jeddah maintained a stable total stock of 1.21 million square meters. However, significant new supply is anticipated in the latter half of the year, with approximately 249,000 square meters in Riyadh and 48,000 square meters in Jeddah slated for completion.
Office demand in the Dammam Metropolitan Area (DMA) is primarily driven by government-related entities, leading to a 10% increase in average Grade A rents in the year to Q2 2024. This trend highlights the region’s growing importance as a hub for public sector activities.
Northern Riyadh’s Prime Destination
The northern region of Riyadh has emerged as a prime destination for office and retail developments, owing to its accessibility, high-quality office options, and relative insulation from traffic congestion issues. This has fueled a surge in demand for quality institutional-grade properties in the area.
Consequently, average Grade A rents in Riyadh rose by an impressive 19% year-on-year, reaching SAR 2,090 ($557) per square meter per annum. Jeddah, too, witnessed an 11% annual increase, with average Grade A rents touching SAR 1,335 per square meter per annum.
The northern region of Riyadh has also appealed to retailers, who have remained cautious of increased market competition and postponed expansion plans due to anticipated new market supply. This trend underscores the region’s growing prominence as a prime commercial hub within the capital city.
Retail Sector’s Consumer Preferences
The retail sector in Saudi Arabia is undergoing a notable transformation, adapting to the evolving preferences of consumers and the rise of e-commerce.
The integration of cinemas, food and beverage establishments, and entertainment facilities into the retail landscape has been a key factor in this evolution, catering to the demand for experiential offerings.
While Riyadh did not witness the completion of any major malls in the first half of 2024, Jeddah expanded its retail space by adding 106,000 square meters through the completion of several zones at Souq 7, bringing the total supply to 2.16 million square meters.
In Jeddah, average rents for super regional malls increased by 4% year-on-year, while regional malls saw a 4% decline.
The retail market in Dammam and Dhahran is focused on super regional and regional malls, while Khobar offers a unique retail experience centered around the corniche.
Despite the challenges posed by increased market competition and the anticipation of new supply, the retail sector is poised for a positive long-term outlook, with an additional 77,000 square meters of retail space expected in Riyadh later in the year.
Dammam Metropolitan Area
The Dammam Metropolitan Area (DMA) is witnessing a notable shift in residential development patterns, trending towards inland locations. Khobar, in particular, has emerged as a hub of activity in this regard, witnessing the majority of new residential projects.
While average sale prices in the DMA have remained stable, rents have seen a modest annual increase of 4%. This trend highlights the region’s growing appeal as a residential destination, driven by the availability of new housing options and the potential for further development.
Investments in Giga Projects
Saudi Arabia’s substantial investments in infrastructure developments and giga projects, including NEOM and the Red Sea Global, have driven growth and resilience in the Kingdom’s real estate market.
Additionally, Saudi Arabia’s real estate and infrastructure projects have been announced to be valued at over $1.25 trillion since 2016.
These ambitious undertakings have facilitated the expansion of residential, hospitality, office, and retail sectors and contributed to the overall economic diversification and transformation envisioned by the Vision 2030 agenda.
Driving Innovative Progress
Saud Alsulaimani, Country Head of KSA at JLL, has emphasized the dynamic and fast-paced evolution of Saudi Arabia’s real estate landscape, which is marked by expansion and opportunities for growth as the Kingdom moves closer to achieving its Vision 2030 goals.
These initiatives, according to Alsulaimani, will enable Saudi Arabia to drive progress, foster innovation, and unlock the full potential of its real estate industry, further solidifying its position as a leading player in the global real estate market.
Supporting Kingdom’s Economic Diversification
Saudi Arabia is preparing to welcome 150 million visitors by 2030 and is hosting a robust pipeline of flagship events, including the Asian Cup 2027, the Asian Winter Games 2029, Riyadh Expo 2030, and the highly anticipated FIFA World Cup 2034.
The real estate sector is poised to play a pivotal role in supporting the Kingdom’s economic diversification efforts and achieving the ambitious goals outlined in the Saudi Vision 2030 blueprint.
Unlocking Saudi Arabia’s Real Estate Potential
Saudi Arabia’s real estate market continues its upward trajectory, fueled by the ambitious Vision 2030 agenda, the Kingdom’s strategic initiatives, and substantial investments in infrastructure developments and giga projects.
The residential, hospitality, office, and retail sectors have all witnessed remarkable growth and resilience, driven by population growth, infrastructure development, and government-backed initiatives.
More Transformative Projects in Riyadh
The Avenues Riyadh
The highly awaited Avenues Riyadh project, valued at $4.58 billion, has reached 44.5% completion and is on schedule to open in early 2026.
Situated in northern Riyadh, this iconic development, inspired by Salmani architecture, will cover 390,000 square meters and house one of the largest malls in the Middle East.
It will also include three luxury hotel towers, inclduing Waldorf Astoria, Canopy by Hilton, and Conrad.
This project is part of Saudi Vision 2030, which seeks to make Saudi Arabia a leading global tourist hub.
Boulevard Business Park
Saudi Arabia’s General Entertainment Authority has unveiled plans for a $266 million business park at Boulevard City in Riyadh.
Named the “[Boulevard Business Park],” this new project will consist of nine buildings with views of the Boulevard City Fountain, an outdoor art gallery, and a suspended pool.
The initiative aims to promote creativity, innovation, and support for entrepreneurs and businesses, in line with Saudi Vision 2030.
Riyadh Metro Project
The Riyadh Metro Project is set to launch soon, emerging as one of the globe’s largest public transportation systems, with the capacity to serve up to 3.6 million passengers daily.
Stretching across 176 kilometers, the network will include 6 lines and 84 stations, linking major spots across Riyadh, such as King Khalid International Airport, KAFD, and the city center.
ROSHN Stadium
ROSHN Group, the premier Real Estate developer in Saudi Arabia, fully owned by PIF, has revealed their plans for a state-of-the-art ROSHN Stadium with a seating capacity of 45,000.
Situated in Southwest Riyadh, the stadium will cover an area of 450,000 square meters and boast a striking crystalline structure that reaches towards the sky.
This will be ROSHN’s inaugural sports project and will include various retail outlets, dining options, and green areas.
The ROSHN Stadium will serve as a venue for major global sports and cultural events, which aligns with the goals of Saudi Vision 2030.
King Salman Stadium
Royal Commission for Riyadh City and The Ministry of Sport have announced designs for the new 92,000 capacity King Salman Stadium in Riyadh.
The stadium, set to be completed in 2029, will serve as the new home ground for the Saudi National Team and host major international sporting events.
With a total area of 660,000 square meters, the stadium will be integrated into the King Abdulaziz Park, including a 150-seat Royal Suite and 120 hospitality suites.
This project aligns with the goals of Saudi Vision 2030, which aims to enhance Riyadh’s reputation as a top global sports destination.
Global Sports Tower
Saudi Arabia has unveiled plans for The Global Sports Tower in Riyadh, which is set to become the world’s tallest sports tower.
This 130-meter towering structure will be located in The Sports Boulevard, one of the major projects in Riyadh.
It is expected to include various world-class sports facilities, such as the highest indoor climbing wall in the world and a running track on its rooftop.
Riyadh Sports Boulevard
The Riyadh Sports Boulevard has been designed to be the longest linear park in the world, with the purpose of connecting the Wadi Hanifa in the western part of Riyadh to the Wadi Al Sulai in the eastern part of the city, spanning a total distance of 135km.
This project aims to transform Riyadh into one of the world’s most livable and healthy cities. The development plans to include various pathways, bike lanes, and horse riding trails, covering a vast area of 4.4 million square meters of green spaces.
The impressive initiative will also consist of 8 exceptional districts, such as an athletics district, an entertainment district, and an arts district.
New Murabba
The most recent video demonstrates significant advancements in the construction of the New Murabba, the largest contemporary downtown in northwest Riyadh.
A remarkable 5 million cubic tonnes of soil have already been removed, and the project is making notable headway.
This ambitious venture covers an area of 19 square kilometers and will include the distinctive cube-shaped Mukaab at its heart, capable of holding 20 Empire State Buildings.
King Salman Park
King Salman Park, the largest urban park in the world, is scheduled to open in 2024, covering a total area of 16 square kilometers.
The park includes 11 square kilometers of greenery and water features in the heart of Riyadh.
Its major attractions will be a Royal Arts Complex, an equestrian center, an 850,000-square-meter Royal golf course, and the city’s first skydiving center.
In addition, the park will offer over 2,000 hotel rooms and aims to elevate the quality of life in the city, following the goals of Saudi Vision 2030, thereby improving Riyadh’s global ranking.
AL-URUBAH Park
The Royal Commission for Riyadh City has recently announced the construction of one of the biggest parks in the city, Al-Uruba Park.
This park, spanning over 754,000 square meters, will include a 3-kilometer long panoramic path, standing 12 meters high, specifically designed to offer breathtaking views of Riyadh.
The park’s landscape will be adorned with more than 600,000 trees and shrubs, covering 65% of the park’s total area, will embellish its landscape.
Al-Uraba Park is a significant part of the Green Riyadh Program. It aims to plant 7.5 million trees in Riyadh to reduce the city’s temperature and air pollution levels and ultimately make it one of the world’s most desirable places to live.
Riyadh Rise Tower
Saudi Arabia Holding Co. has unveiled its plans for the Rise Tower, which is set to become the world’s tallest skyscraper in Riyadh, surpassing even the renowned Burj Khalifa. The unveiling of Rise Tower’s plans is a significant component of the broader North Pole Project in Riyadh.
Rise Tower is anticipated to exceed 828 meters to outshine the Burj Khalifa. There are speculations that Rise Tower might ascend to a staggering 2 kilometers, doubling the Burj Khalifa’s current height.
With these transformative projects, Riyadh, one of the world’s top 15 fastest-growing cities, is transforming into a city known for its accessibility and quality of life to become among the world’s top 10 cities with an investment of $1 trillion over the next seven years.
Keep Reading: The Avenues Riyadh is Now 44.5% Complete and on Track to Open in Early 2026
