2024年夏季沙特阿拉伯商业市场回顾

A biannual review of key trends and the performance ofSaudi Arabia’s commercial real estate market Summer - 2024 Market Roundup Business is booming in Saudi Arabia HOSPITALITY SECTOR Forthe first time,the Kingdom’s non-oilrevenue hit 50% of GDP in 2023, translating intoeconomic output of US$ 453 billion (Ministry ofEconomy and Planning). “Program HQ’continues tofuel a rise indemand foroffice spacein Riyadh.Indeed, to date,350 Europeancompanieshave beengrantedlicenses toestablish theirregional HQsin the capital.” The Kingdom achieved its 2030 goal of attractingover 100 million visitors last year, with a total of106.2 million visitors, 27.4 million of whom wereinternational arrivals. The ongoing economic expansion is driving updemand for commercial real estate across allsubsectors, with the office market in Riyadh, inparticular, emerging as the primary beneficiaryof rising office requirements. Religious tourism has played a significant role inachieving this milestone. Indeed, in 2023, nearly2 million Hajj pilgrims and 27 million Umrahpilgrims visited the Holy Cities of Makkah andMadinah. Overall,the commercial real estate marketcontinues to demonstrate robust performance,with yields remaining high for offices at 7.75%,underpinned by dwindling availability and fast-rising rents. With the 2030 visitor target being reached 7 yearsahead of schedule, authorities have revised the2030 target to 150 million. Separately, investors continue to enter the Saudimarket in record numbers. Indeed, the SaudiMinistry of Investment issued 2,884 investmentlicenses in Q4 2023, which is up 125% year-on-year and the highest number of licenses everissued in a single quarter. DATA CENTRES Saudi Arabia is fast emerging as the region’smain data hub and is the fastest-growing datacentre market in the Middle East. The Kingdom’slive IT capacity has risen by 29.7% to 109MW in2023, with the data centre market split betweenRiyadh, Jeddah and Dammam, which host 80%of live IT supply, or 40MW, 29MW and 19MW,respectively.Growth in the sector is being fuelledby government initiatives and factors such asrising cloud computing adoption, a boominge-commerce market, improved connectivity andincreasing recognition of big data & IoT. Furthermore,Q12024recorded104,000commercial registrations (business licenses), a59% rise on Q1 2023, bringing the total numberof registrations to over 1.45 million across theKingdom. OFFICE SECTOR ‘Program HQ’ continues to fuel a rise in demandfor office space in Riyadh. Indeed, to date, 350European companies have been granted licensesto establish their regional HQs in the capital. The rollout of 5G and the introduction of thePersonal Data Protection Law in the countryis expected to further boost demand movingforward. Vacancy rates for grade A space continue to slip,while prime rents in Riyadh have risen by 8% inthe last 12 months and by 36.8% since Q1 2021. As a result of these initiatives, we forecast US$30bn of CAPEX in the sector by 2030. Grade B rents in the capital have also surged by25.6% in the last 12-months as a lack of primespace is forcing businesses to secure what isperhaps less than ideal space. Market Performance Office Market RIYADH JEDDAH DMA Growth in office demand in DammamMetropolitanArea(DMA)continuedin the 12 months to the end of Q1 2024,puttingupward pressure on rents.GradeA rents increased by 3.5%toSAR 1,025 psm, and Grade B rents grewmarginally by 1.6% to SAR 625 psm. Fuelledbyrisingdemandpredominantly from the public sector,rents in Jeddah’s office market continueto rise. Grade A rents are SAR 1,235 psm,which is an increase of 23.5% on Q1 2021and 3.8% over the last 12-months. GradeB rents increased by 2% to SAR 790 persqm in the 12-months to the end of Q12024. Riyadh’s office lease rates continue toclimb in the wake of growing demand.Grade A office rents have risen by 8%over the last 12-months to SAR 2,005psm, while grade B rents have grownby 26% to SAR 1,225 psm over the sameperiod. Occupancy levels stand at 98%for Grade A and 91% for Grade B. Averageoccupancy across Grade Aoffice space increased by 5% to reach85% in Q1 2024. Grade B occupancylevels have also risen by 3% to reach73%. The rapid increase in rents in Riyadhhas,in part,been catalysed by theKingdom’s‘Program HQ’initiative,whichaims to raise the number ofregional HQs in the capital from thecurrent 350 to 480 by 2030 (MISA). Given the absence of any significantnew supply and increase in demand, weexpect rents to climb further. There were no major office completionsin Q1 2024, keeping the total office stockunchangedat 1.37 million sqm.Thetotal quality office stock is expected toreach 1.55 million sqm by 2026. The occupancy rate across the gradeA market decreased by 2 percentagepoints over the last 12-months to 93% inQ1 2024. In contrast, Grade B occupancyrates have remained unchanged at 85%over the same period. The high occupancy rates across GradeA offices remain virtually unchangedin the last 12 month