Executive Summary: Riyadh's Commercial Market Supercycle
Riyadh is experiencing the tightest commercial real estate market of any major global city. JLL reports Grade-A office vacancy at just 0.5%, while Knight Frank confirms 98%+ occupancy across premium developments. Prime office rents have reached SAR 3,630/sqm (+7.3% year-on-year), with the King Abdullah Financial District commanding rates exceeding SAR 4,000/sqm. Since 2019, cumulative rent increases have topped 86% — prompting the government to impose a 5-year rent freeze on existing commercial leases in late 2025. Riyadh commercial transactions totaled SAR 65.6 billion in H1 2025 alone (+63% YoY). The New Murabba district, wholly owned by the Public Investment Fund, adds $50 billion in mixed-use development to this already overheated market. Intelligence tracked by Vision 2030 AI.
Office Market Fundamentals: Supply Crisis
The supply-demand imbalance driving Riyadh's commercial market stems from two converging forces: the Regional Headquarters Program (RHQ) requiring multinational corporations to establish MENA headquarters in Saudi Arabia, and organic economic expansion under Saudi Vision 2030. To date, 660+ firms have relocated regional headquarters to Riyadh — exceeding the original 500-company target five years ahead of schedule. The Ministry of Investment confirmed that new RHQ arrivals include companies from financial services, consulting, technology, energy, and consumer goods sectors, each requiring 2,000-15,000 sqm of Grade-A office space.
The King Abdullah Financial District has emerged as the epicenter of corporate Riyadh, hosting 140+ tenants including 75+ regional headquarters. KAFD's 15.46-kilometer elevated skyway — certified as a Guinness World Record for the longest continuous pedestrian sky bridge — connects commercial towers to retail, hospitality, and residential components. Current KAFD rents exceed SAR 4,000/sqm, with waiting lists for premium floors. Comparable Grade-A buildings in KAFD, Diplomatic Quarter, and northern Riyadh corridors achieve 100% occupancy before completion according to CBRE.
REIT Market: 20 Listed Vehicles, SAR 20B+ Assets
Saudi Arabia's real estate investment trust market offers institutional exposure to the commercial property boom. The Saudi Exchange (Tadawul) lists 20 REITs with combined assets exceeding SAR 20 billion and average dividend yields of 6.61%. Top performers include Riyad REIT (SAR 4.2B assets), SEDCO Capital REIT (SAR 3.1B), and Jadwa REIT (SAR 2.8B). The Capital Market Authority (CMA) has progressively liberalized REIT regulations, most recently abolishing the Qualified Foreign Investor (QFI) regime on February 1, 2026 — meaning all foreign investors can now access Saudi REITs directly through the Saudi Exchange (Tadawul). REIT total returns have outperformed the TASI benchmark by 340 basis points annually since 2021 per S&P Global.
Non-Saudi Real Estate Ownership: January 2026 Reforms
Royal Decree M/14 — the new Non-Saudi Real Estate Ownership Law — became effective on January 22, 2026. This landmark reform permits foreign nationals and entities to own commercial and residential property across Saudi Arabia (with Makkah and Madinah exceptions). Previously, foreign ownership was restricted to diplomatic compounds and industrial zones. The reform, administered by Real Estate General Authority (REGA), enables direct commercial property acquisition — a game-changer for institutional investors evaluating New Murabba district opportunities. Combined with QFI abolition and the Saudi Depositary Receipts framework (launched July 2025), Saudi Arabia now offers the most open property investment regime in the Gulf.
New Murabba Commercial District: $50B Pipeline
The New Murabba Development Company development — spanning 19 square kilometers — is designed to deliver 90,000 residential units, 10,100 hotel rooms, 1.4 million sqm of retail, and 980,000 sqm of prime office space anchored by The Mukaab. While The Mukaab superstructure construction was paused in January 2026 per Reuters, Parsons Corporation was awarded a 60-month Integrated Lifecycle Delivery Contract on January 13, 2026 for the broader district build-out. Foundation work continues: 1,000+ of 1,200 piles complete (83%) and 14 million cubic meters excavated. Knight Frank values the total development at $50 billion, with $3.6 billion commissioned as of late 2023. The Jacobs/AECOM JV was appointed Lead Design Consultants on November 5, 2025.
For commercial tenants, New Murabba's 15-minute-city design integrates Grade-A office towers with residential, retail, entertainment, and cultural districts — mimicking the walkable density model that has driven premium rents at KAFD and Diriyah Gate. A modular fit-out RFI was issued on January 26, 2026 for the district's four corner towers, signaling near-term construction activity even as The Mukaab timeline extends to 2030-2040 phased delivery.
Rent Freeze Analysis: Impact on Commercial Investment
The government's late-2025 imposition of a 5-year rent freeze on existing commercial leases represents both risk and opportunity. For existing tenants, leases signed at SAR 2,000-3,000/sqm are now locked well below market rates. For investors, this creates a two-tier market: frozen legacy leases and new leases at current rates (SAR 3,630+/sqm). New developments like New Murabba are unaffected by the freeze, as all leases will be new. This effectively advantages greenfield developments and creates a pricing premium for new supply — a dynamic tracked in detail by Vision 2030 AI.
Expo 2030 & FIFA 2034: Commercial Demand Catalysts
Expo 2030 Riyadh (October 2030 - March 2031) is projected to attract 42 million visits with $7.8 billion in capital expenditure across a 6 million sqm site. Bechtel serves as PMC, with Buro Happold leading design. As of February 2026, 1.5 million sqm (25%) of the site has been leveled, with building construction targeted for Q3 2026. FIFA 2034 requires 15 stadiums (11 new) across 5 cities with investment exceeding $20 billion. The King Salman International Stadium (92,760 capacity, 2029 completion) anchors this program. Both mega-events will generate sustained demand for commercial space, corporate hospitality suites, media centers, and ancillary office requirements well beyond event periods.
Construction Market: $819 Billion Pipeline
Saudi Arabia's construction sector — valued at $78.6-101.4 billion annually with 5,200+ active projects — feeds directly into commercial real estate supply. Knight Frank reports giga-project contracts rose 20% in 2025 to $196 billion, though KAMCO Invest noted a 72.5% YoY contract decline in Q2 2025 to $9.8 billion, reflecting selective capital deployment. The total pipeline exceeds $819 billion. Modular construction is accelerating: China Harbour Engineering commissioned a 200,000 sqm modular facility in February 2025, while NEOM-Samsung C&T formed a SAR 1.3 billion robotics JV targeting 40% cost savings.
Investment Risk Factors
Key risks include: supply overshoot (if multiple giga-projects deliver simultaneously post-2030), oil price dependency (IMF Saudi Country Report forecasts ~4% fiscal deficits through 2027), construction cost inflation, and the 5-year rent freeze compressing yields on existing assets. The Mukaab's January 2026 pause introduces timeline uncertainty for New Murabba commercial space specifically. Currency risk remains minimal (SAR-USD peg at 3.75). Net-zero commitments (2060 target, 58.7 GW clean energy capacity) increasingly influence commercial building specifications per World Bank Saudi Data.
Conclusion: The Commercial Real Estate Investment Case
Riyadh's commercial real estate market offers a rare institutional opportunity: near-zero vacancy, 86% rent appreciation in five years, structural demand from 660+ multinational relocations, and a $50 billion new district backed by the world's largest sovereign wealth fund. The combination of QFI abolition, non-Saudi ownership reforms, and REIT market maturation creates the most accessible entry framework in Saudi history. Track evolving opportunities through Vision 2030 AI, Capital Market Authority (CMA), and Real Estate General Authority (REGA).