Riyadh:– Saudi Arabia’s real estate sector has started the year with fragmented performance and activity levels across the Kingdom’s regions.

Looking at Saudi Arabia’s office sector figures, visitation to the workplace has since late September 2021 remained above its pre-pandemic baseline and now sits 19.7% above the baseline, with the majority of occupier activity continuing to be very much skewed towards Riyadh. As a result, we have seen average rents in Riyadh’s Grade A segment increase by 8.6% and Grade B rents by 6.0% in Q1 2022. These market fundamentals also mean that landlords are seldom offering incentives. In Jeddah, despite the lack of activity and with limited availability in the Grade A segment, Grade A rents rose by 10.8% in the first quarter, whereas Grade B rents continued to soften and fell by 4.3%. Grade A rents in Dammam and Khobar increased by 4.0% and 2.6% respectively, with Grade A rents in both locations now above their pre-pandemic levels.

Residential transaction volumes in Saudi Arabia fell by 23.4% in Q1 2022, compared to a year earlier, while the total value of transactions fell marginally by 1.9%. During this period, the number of transactions totaled 60,336 and the value of transactions reached SAR40.41 billion. In Riyadh, the total number of transactions in Q1 2022 fell by 21.6%, and it also fell in the Damam Metropolitan Area (DMA) by 31.8%. Jeddah on the other hand saw transactions volumes increase by 5.4% in the 12 months to Q1 2022. Over the same period, average apartment prices in Saudi Arabia have increased by 9.6%, with prices in Riyadh, Khobar, Dammam and Jeddah increasing by 13.2%, 11.3%, 9.6% and 4.5% respectively.

Looking at Saudi Arabia’s hospitality sector, the average occupancy rate in the first quarter increased by 23.4 percentage points compared to a year earlier. Over the same period, despite the ADR falling marginally by 0.3%, RevPAR, on average, increased by 66.2%. In the year to date to March 2022, compared to the sameperiodin2019,whilstoccupancy sits 2.3 percentage points lower, the ADR and average RevPAR increased by 12.0% and 7.8% respectively. 

Taimur Khan, Head of Research – MENA at CBRE, comments:

“Looking ahead, due to the easing of restrictions, particularly in relation to religious tourism, a number of planned events such as the continuation of the Saudi Seasons initiative, and returning business visitation, we expect that performance in Saudi Arabia’s hospitality sector will continue over the course of 2022. However, as other global locations also continue to open their borders for restriction-free travel, we expect that locations which have benefitted from redirected visitations over the last two years, such as Al Khobar, will see performance levels deteriorate until the second half of 2022.”


About CBRE Group, Inc.

CBRE Group, Inc. (NYSE: CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2020 revenue). The company has more than 100,000 employees serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.