Rental Rates Office Space Riyadh, Tijan Plaza Project Overview

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Office Real Estate Market in Riyadh Led by Demand
from Private Sector of Economy Ken Research
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Focus on diversification of economy, promotion of
manufacturing and services sector and demand from
services related to rising number of industrial
unit led the growth in demand for office space in
Riyadh. Saudi Arabia is a key oil exporting
country in the world and in the past few years
has witnessed significant rise in other form of
industries and services including energy,
education banking and other service. This
diversification of economy has created a
significant rise in demand for office spaces
across the country and especially in the capital
city of Riyadh. Private players are the key
participants in the rental office real estate
market with small contribution coming from
government agencies. During the period
2013-2016 office real estate market has
registered constant increase in demand and supply
with supply exceeding the demand all the time.
Rentals have remained nearly constant for most of
the period and were dependent on type and area of
the office. Demand was maximum in the central
business district which occupies the major
portion of the office space supply in the city of
Riyadh.
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Rising share of private participation in the
economy, entry of large number of foreign
companies and positive developments in services
and manufacturing sector along with growing
participation of Saudi and women workforce
promoted the demand for office space which is
expected to continue in future. Demand for office
space in Riyadh may face stiff competition from
office space development in Jeddah and other
cities. Government support will continue to play
a key in creating new jobs and diversification of
economy from oil and gas creating additional
demand for office space in the city. The report
titled Riyadh Office Real Estate Market by Major
Projects (Elegance Tower, Al Saedan Towers, Tijan
Plaza, Hamad Tower, Tatweer Tower) -Outlook to
2021 by Ken Research suggested that a Total
occupied office space increased from 1.9 million
square meters in 2013 to approximately 2.2
million square meters during 2016, achieving a
CAGR of 4.4 during the same period. In 2016, the
supply demand gap continues to exist even though
the delay was observed in delivery of mammoth
office spaces in KAFD
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