Market Overview
| Study Period | 2019 - 2030 |
|---|---|
| Base Year For Estimation | 2024 |
| Forecast Data Period | 2025 - 2030 |
| Market Size (2025) | USD 132.41 Billion |
| Market Size (2030) | USD 141.16 Billion |
| Growth Rate (2025 - 2030) | 6.61% CAGR |
| Market Concentration | Medium |
Major Players *Disclaimer: Major Players sorted in no particular order Image © Mordor Intelligence. Reuse requires attribution under CC BY 4.0. | |
Saudi Arabia Commercial Real Estate Market Analysis by Mordor Intelligence
The Saudi Arabia commercial real estate market size stands at USD 132.41 billion in 2025 and is forecast to reach USD 141.16 billion by 2030, rising at a 6.61% CAGR. Ongoing Vision 2030 initiatives, a USD 1.1 trillion project pipeline, and the Public Investment Fund’s (PIF) pivot toward domestic allocations are underpinning steady demand across office, retail, hospitality, and industrial assets. Growing institutional appetite for income-producing properties, liberalized foreign-ownership rules in Makkah and Madinah, and the registration of more than 500 foreign regional headquarters since 2021 are keeping prime offices well demand. Logistics platforms enjoy additional tailwinds from surging e-commerce volumes, while religious tourism is accelerating hotel absorption in Makkah and Madinah. Near-term headwinds include hybrid-work adoption, rising construction costs, and climate-risk mitigation expenses, yet these factors are outweighed by land-price appreciation near giga-projects and premium rents commanded by certified green buildings.
Key Report Takeaways
- By property type, offices led with a 31% share of the Saudi Arabia commercial real estate market revenue in 2024. The Saudi Arabia commercial real estate market for logistics assets is projected to expand at a 7.34% CAGR between 2025-2030.
- By business model, sales transactions held 69% of the Saudi Arabia commercial real estate market share in 2024. The Saudi Arabia commercial real estate market for rentals registers the fastest growth at 7.12% CAGR between 2025-2030.
- By end-user, corporates and SMEs accounted for 65% of the Saudi Arabia commercial real estate market size in 2024. The Saudi Arabia commercial real estate market for individual household demand is advancing at a 7.01% CAGR between 2025-2030.
- By region, Riyadh controlled 48% of the Saudi Arabian commercial real estate market in 2024. The Saudi Arabian commercial real estate market for Makkah, the fastest-growing region, is advancing with a 7.22% CAGR between 2025-2030.
Saudi Arabia Commercial Real Estate Market Trends and Insights
Drivers Impact Analysis
| Driver | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
|---|---|---|---|
| Accelerated demand for prime industrial & logistics space driven by e-commerce | +1.8% | Eastern Province, Riyadh Logistics Park | Short term (≤ 2 years) |
| Government-backed infrastructure pipeline lifting commercial land values | +1.5% | National, giga-projects | Long term (≥ 4 years) |
| Surge in institutional capital allocation to core office assets | +1.2% | Riyadh, Jeddah, KAFD | Medium term (2-4 years) |
| Re-rating of ESG-compliant green buildings unlocking premium rents | +0.9% | Major cities, NEOM, Red Sea developments | Medium term (2-4 years) |
| Rebound in international tourism revitalizing CBD hotel RevPAR | +0.7% | Makkah, Madinah, Red Sea coast | Short term (≤ 2 years) |
| Data-localization mandates fueling edge data-centre development | +0.6% | Cloud Computing Special Economic Zone | Medium term (2-4 years) |
| Source: Mordor Intelligence | |||
Surge in Institutional Capital Allocation to Core Office Assets
PIF-backed platforms and multinational headquarters mandates are channeling large ticket investments into Grade-A towers, especially in the King Abdullah Financial District, where the 385-meter PIF Tower incorporates photovoltaic façades that lower energy intensity and command rent premiums. A USD 2 billion Brookfield-PIF venture earmarks at least half its capital for domestic offices, tightening vacancy in central Riyadh. Higher transparency following REIT rule enhancements is broadening exit options for global investors, while Shariah-compliant structures attract regional capital. As a result, the Saudi Arabia commercial real estate market registers deeper liquidity in the core office niche.
Accelerated Demand for Prime Industrial & Logistics Space Driven by E-Commerce
The Integrated Logistics Bonded Zone offers 50-year tax holidays and 100% foreign ownership, enticing firms such as DB Schenker and Ceva to expand regional distribution hubs. Strong port throughput at King Abdullah Economic City and USD 4.5 billion slated for maritime upgrades are shortening delivery lead times and boosting take-up of modern warehouses. As online retail penetration climbs, developers are converting outdated factories into temperature-controlled fulfillment centers, reinforcing the Saudi Arabia commercial real estate market as a GCC logistics leader.
Government-Backed Infrastructure Pipeline Lifting Commercial Land Values
Saudi Arabia is on course to become the world’s largest construction market by 2028 with USD 181.5 billion in projects on site. Flagships such as NEOM (USD 500 billion) and New Murabba (USD 48 billion) are expanding utility grids, roads, and transit lines that raise adjacent land prices and spark mixed-use master plans. Developers leveraging early-stage land-banking strategies are capturing double-digit capital gains, cementing long-term upside for the Saudi Arabia commercial real estate market.
Re-Rating of ESG-Compliant Green Buildings Unlocking Premium Rents
Forbes International Tower—the first to seek Zero-Carbon Certification—uses 75% clean hydrogen plus on-site solar, trimming operating costs by 35% and achieving lease rates 18% above submarket averages. National programs such as Mostadam and the Saudi Green Building Code formalize incentives for high-performance assets. Lenders now apply favorable margin discounts for certified projects, encouraging developers to embed renewable micro-grids and smart metering. This green re-rating widens the value gap between compliant and legacy stock within the Saudi Arabia commercial real estate market.
Restraints Impact Analysis
| Restraint | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
|---|---|---|---|
| Elevated Construction Costs & Labour Shortages Delaying Project Delivery | -1.1% | National, acute in giga-projects | Long term (≥ 4 years) |
| Persistent Work-from-Home Adoption Softening CBD Office Net Absorption | -0.8% | Riyadh CBD, Jeddah business districts | Short term (≤ 2 years) |
| Monetary Tightening and Rising Cap Rates Compressing Transactions | -0.6% | Major cities, institutional investment hubs | Short term (≤ 2 years) |
| Heightened Climate-Risk Exposure Raising Insurance Premiums for Coastal Assets | -0.4% | Red Sea coast, NEOM, coastal developments | Long term (≥ 4 years) |
| Source: Mordor Intelligence | |||
Persistent Work-from-Home Adoption Softening CBD Office Net Absorption
Global leasing volumes remain 12% below pre-pandemic peaks, and lower-grade Saudi buildings face rising vacancy even as trophy assets stay full. Flexible-workspace operators are capturing tenants seeking short tenures, pressuring owners to overhaul legacy lease structures. Although the regional-headquarters scheme mandates physical presence, several firms minimize footprints via satellite hot-desk models, tempering immediate demand growth in the Saudi Arabia commercial real estate market.
Elevated Construction Costs & Labor Shortages Delaying Project Delivery
A USD 850 billion national project queue strains material supply and migrant labor availability, with steel prices up 18% since 2023 and skilled-worker wages climbing 22%. Payment lags on public contracts tighten contractor liquidity, extending completion timelines for mixed-use assets around giga-projects. Higher contingency pricing is feeding through to end-user rents and sales values, narrowing affordability margins within the Saudi Arabia commercial real estate market.
Segment Analysis
By Property Type: Logistics Drives Diversification
Logistics facilities are the fastest-growing component of the Saudi Arabia commercial real estate market, recording a 7.34% CAGR through 2030 as e-commerce volumes surge and manufacturers seek proximity to export hubs. Offices still hold the largest 31% slice of 2024 revenue, but sustained absorption in build-to-spec warehouses is enlarging the Saudi Arabia commercial real estate market size for industrial assets. Developers capitalize on 50-year free-zone incentives to roll out multilevel fulfillment centers near Riyadh and Dammam ports, raising yields 120 basis points above core offices.
The Saudi Arabia commercial real estate market also benefits from 320,000 hotel keys under development, reflecting tourism-led diversification. Retail footprints evolve toward experiential formats inside mixed-use malls financed by SAR 5.25 billion (USD 1.39 billion) sustainability-linked loans. Data-center shells round out the “others” category, supported by USD 10 billion in hyperscale spending. Together, these shifts balance the portfolio away from historic office concentration and enlarge the Saudi Arabia commercial real estate market share for non-office segments.
Note: Segment shares of all individual segments available upon report purchase
Get Detailed Market Forecasts at the Most Granular Levels
Download PDF
By Business Model: Rental Gains Momentum
Sales transactions retained 69% of turnover in 2024, yet rentals grow faster at 7.12% CAGR as asset managers prize predictable cash flows in a higher-rate world. Expanded REIT guidelines and 49% foreign-ownership allowances in holy-city real estate broaden both sponsors and investor bases, reinforcing the Saudi Arabia commercial real estate market. The Capital Market Authority’s move to permit offshore securities activities channels new liquidity into income-oriented vehicles.
Institutions increasingly prefer long-income strategies such as sale-and-leasebacks and build-to-rent schemes. ROSHN is allocating part of its SAR 350 billion (USD 93.27 billion) pipeline to mixed-use projects containing 4 million m² of leasable commercial space. Bank lending, up 40.5% year-on-year to SAR 374.5 billion (USD 99.80 billion), embraces an originate-to-distribute model that redistributes risk while supporting steady rental-stock expansion within the Saudi Arabia commercial real estate market.
Note: Segment shares of all individual segments available upon report purchase
Get Detailed Market Forecasts at the Most Granular Levels
Download PDF
By End-user: Corporate Demand Sustains Growth
Corporates and SMEs occupied 65% of floor space in 2024, a ratio reinforced by the A+ credit upgrade that lowers borrowing costs and encourages business expansion. Mandatory headquarters rules require multinational firms to station senior staff locally, locking in office demand and lifting the Saudi Arabia commercial real estate market size for premium towers[1]U.S. International Trade Administration, “Saudi Arabia – Real Estate Sector,” trade.gov.
Household participation is catching up, driven by a National Housing Program pushing the home-ownership rate toward 70%. Mortgage-backed sukuk issuance and a SAR 190 billion (USD 50.63 billion) Real Estate Development Fund pipeline improve affordability, feeding spill-over demand for neighborhood retail and small-format offices. Government bodies and quasi-sovereigns in the “others” bracket absorb specialized assets such as data centers and research parks, diversifying the Saudi Arabia commercial real estate market.
Geography Analysis
Riyadh anchors 48% of the Saudi Arabia commercial real estate market, buoyed by population growth to 9.6 million by 2030 and the New Murabba vision that adds 104,000 homes, 9,000 hotel rooms, and a landmark cube entertainment center. The Integrated Logistics Bonded Zone’s investor incentives are drawing distribution networks that lift office and warehouse demand by double digits. ROSHN’s 20 million m² SEDRA community, sited near the international airport, further swells mixed-use supply and enlarges the Saudi Arabia commercial real estate market size in the capital.
Makkah posts the fastest 7.22% CAGR, supported by the Jabal Omar mega-development that places 5,000 keys within walking distance of the Grand Mosque. Religious tourism reached 35.8 million Umrah pilgrims in 2024, and giga-project pipelines commit 252,000 future hotel rooms, extending the Saudi Arabia commercial real estate market well beyond legacy hospitality zones. Liberalized foreign ownership in holy-site corporates adds depth to investment inflows targeting retail arcades and serviced apartments.
The Eastern Province leverages the privately run port at King Abdullah Economic City—one of the world’s fastest-growing—to attract light-industrial clusters and maritime logistics firms[2]Mohammed Al-Rasheed, “Port Performance Statistics 2024,” Economic Cities Authority, ecza.gov.sa. Inland residential growth around Khobar pairs with luxury retail in Dammam and Dhahran, balancing petrochemical-driven office needs. North-west mega-projects such as NEOM, Sindalah island[3]NEOM Company, “Sindalah Island Fact Sheet,” NEOM, neom.comand the Red Sea tourism corridor widen the geographic footprint of the Saudi Arabia commercial real estate market introducing net-zero hotels and carbon-positive villages that set new regional benchmarks.
Competitive Landscape
The commercial real estate market in Saudi Arabia is moderately fragmented, with state-backed ROSHN emerging as a formidable player. Armed with SAR 350 billion (USD 93.27 billion), ROSHN challenges established private developers by capitalizing on its vast land banks, integrated infrastructure, and preferential access to capital. Kingdom Holding, in partnership with Red Sea Global, is making waves with its Shura Island project, blending brand prestige with the grandeur of a giga-project. Simultaneously, Dar Al Arkan is diversifying its funding sources by issuing offshore sukuk to finance branded residences, underscoring the growing importance of capital market diversification in the region.
Technology and sustainability are decisive differentiators. Forbes International Tower’s hydrogen-solar energy mix secures the world’s first Zero-Carbon registration and lifts effective rents, prompting rivals to retrofit façades and HVAC systems. Prop-tech applications—from digital twin asset management to blockchain land registry, streamline leasing and cut vacancy by up to 4 percentage points. Consolidation is active; 108 merger filings in Q1-2025 featured 80% foreign acquirers, signaling rising cross-border interest that may reshape the Saudi Arabia commercial real estate market.
White-space prospects lie in tier-2 urban nodes such as Taif and Al-Ahsa, where annual visitor flows exceed 20 million, yet branded hotel stock remains thin. First-mover developers securing plots near new airports or rail links can harvest premium returns once infrastructure completes, adding competitive tension across the Saudi Arabia commercial real estate market.
Saudi Arabia Commercial Real Estate Industry Leaders
Al Saedan Real Estate Co.
Jabal Omar Development Co.
Dar Al Arkan Real Estate Development
Kingdom Holding Company
SEDCO Development
- *Disclaimer: Major Players sorted in no particular order
Need More Details on Market Players and Competitors?
Download PDF
Recent Industry Developments
- February 2025: DataVolt agreed with NEOM to build a net-zero AI factory with a USD 5 billion outlay, operational by 2028.
- February 2025: The new Investment Law took effect, abolishing foreign-investment licensing and granting equal treatment to overseas investors.
- November 2024: ROSHN rebranded to expand beyond housing, unveiling 200 million m² of residential and 4 million m² of commercial pipeline.
- October 2024: PIF and Brookfield formed Brookfield Middle East Partners, a USD 2 billion vehicle with at least 50% allocation to Saudi assets.
Research Methodology Framework and Report Scope
Market Definitions and Key Coverage
Our study defines Saudi Arabia's commercial real estate market as the annual income potential, both sale and rental, of completed, income-generating non-residential property located within the kingdom, including offices, retail centers, logistics and industrial sheds, hotels, and mixed-use assets. According to Mordor Intelligence, developments enter the model only after official completion certificates are issued.
Vacant land, purely residential units, and standalone property-management services are excluded.
Segmentation Overview
- By Property Type
- Offices
- Retail
- Logistics
- Others (Industrial, Hospitality, etc.)
- By Business Model
- Sales
- Rental
- By End-user
- Individuals / Households
- Corporates and SMEs
- Others
- By Region
- Riyadh
- Jeddah
- Makkah
- Rest of Saudi Arabia
Detailed Research Methodology and Data Validation
Primary Research
Mordor analysts interviewed brokers in Riyadh and Jeddah, logistics-park operators, hotel asset managers, and policy officials across the kingdom. Their feedback validated vacancy spreads, effective rent levels, pipeline timing, and foreign-capital sentiment, closing gaps left by desk research.
Desk Research
We compiled macro and sector inputs from tier-1 public sources such as the General Authority for Statistics, Saudi Central Bank, the Real Estate General Authority, and Ministry of Tourism, supported by association releases, developer filings, and reliable press. Paid platforms, D&B Hoovers for company financials and Dow Jones Factiva for deal tracking, supplied granular cross-checks. These illustrate our desk sources; many other references were consulted for confirmation.
Market-Sizing & Forecasting
We reconstructed the 2024 market using a top-down build of construction completions and REGA transaction registers, followed by selective bottom-up roll-ups of sampled asset sales to refine anomalies. Variables such as building-permit issuances, Grade A office vacancy, foreign direct investment inflows, e-commerce parcel volumes, and pilgrim arrivals feed the model. An ARIMA forecast, scenario-tested with interviewees, extends results to 2030.
Data Validation & Update Cycle
Outputs undergo dual analyst review, variance checks against independent indicators, and, before publication, a fresh pass to reflect any material events. Models refresh annually, with interim updates triggered by policy shifts or mega-project announcements.
Why Our Saudi Arabia Commercial Real Estate Baseline Stands Out for Decision Makers
Published estimates frequently diverge because firms adopt different asset baskets, pricing bases, and refresh cadences.
The comparison below illustrates how those choices alter the headline number.
Benchmark comparison
| Market Size | Anonymized source | Primary gap driver |
|---|---|---|
| USD 132.41 B (2025) | Mordor Intelligence | - |
| USD 67.50 B (2024) | Regional Consultancy A | Omits hospitality and logistics assets; sale data only |
| USD 34.90 B (2024) | Global Consultancy B | Focuses on Grade A offices in three cities; ignores rental flows |
| USD 45.20 B (2024) | Industry Journal C | Applies conservative price-per-sqm, excludes pipeline deliveries |
Mordor Intelligence captures a broader asset mix, aligns prices with verified closings, and applies a disciplined update cadence, giving stakeholders a balanced, transparent baseline rooted in traceable variables and repeatable steps.
Need A Different Region or Segment?
Customize Now
Key Questions Answered in the Report
What is the current value of the Saudi Arabia commercial real estate market?
The sector is valued at USD 132.41 billion in 2025 and is projected to reach USD 141.16 billion by 2030.
Which property segment is growing the fastest?
Logistics and industrial assets lead with a 7.34% CAGR, powered by e-commerce and free-zone incentives.
How much of the market does Riyadh command?
Riyadh holds 48% of total activity, supported by headquarters mandates and New Murabba’s mixed-use pipeline.
Why are rentals gaining momentum over sales?
Investors favor stable cash flows, reinforced by expanded REIT rules and higher interest-rate environments that lift the appeal of income-producing assets.
What sustainability standards are influencing asset values?
Programs such as Mostadam and LEED, along with pioneering projects like Forbes International Tower, push developers toward net-zero designs that command premium rents.
How will the new Investment Law affect foreign participation?
By removing licensing barriers and granting equal treatment, the law is expected to accelerate inbound capital and deepen liquidity across the Saudi Arabia commercial real estate market.
