Saudi Arabia Commercial Real Estate Market Surging to USD 90.9 Billion by 2033 with 3.35% CAGR

Saudi Arabia Commercial Real Estate Market Overview

Market Size in 2024 : USD 67.5 Billion

Market Size in 2033: USD 90.9 Billion

Market Growth Rate 2025-2033: 3.35%

According to IMARC Group's latest research publication,"Saudi Arabia Commercial Real Estate Market Report by Type (Offices, Retail, Industrial, Logistics, Multi-family, Hospitality), and Region 2025-2033", Saudi Arabia commercial real estate market size reached USD 67.5 Billion in 2024. Looking forward, the market is expected to reach USD 90.9 Billion by 2033, exhibiting a growth rate (CAGR) of 3.35% during 2025-2033.

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Growth Factors in the Saudi Arabia Commercial Real Estate Market

• Vision 2030 and Government Initiatives

The vision 2030 of Saudi Arabia is a game changer with regards to the availability of commercial real estates as the economy moves to be less oil dependent. Massive investments of the government in infrastructure, such as metro services and roads in Riyadh, Jeddah, and Dammam, help increase connectivity and the value of premium locations. To give an example, a 176.7-km project, Riyadh Metro is becoming a price driver of office space and retail space around it. Development of schemes such as the Regional Headquarters initiative is attracting foreign business, with Grade-A office facilities in Riyadh recording 98 per cent occupancy with rents reaching 472 dollars in a square meter. Mortgage lending is also expanding due to the Sakani program and Real Estate Development Fund, which provide mortgages at 0 percent interest rates, and the growth is 5.3 percent in the half-year of 2024. Such initiatives are establishing an investment-friendly culture.

• Urbanization and Population Growth

The fast-track migration to the cities is fueling the demand of commercial real estates in Saudi Arabia. The cities of Riyadh and Jeddah are where 85.1 percent of the population is currently dwelling, and they have an urgent requirement of office, retail centers, and mixed-use property. The rentable office rates rose by 36 percent in Riyadh itself by early 2024, as almost all of the offices were occupied, and new companies entered the Kingdom. Population of the country In 2007, the population of the country was more than 35 million and was growing at 3.3% each year; the population is young and urban. This population growth is igniting retail growth and shopping centers are being constructed to accommodate the increasing consumer spending. To keep up with this urban boom, projects such as Jeddah Central, a 20-billion-dollar waterfront project, are accommodating the demand by conjoining business and tourist amenities as a viable source of hubs.

• E-Commerce and Logistics Expansion

The Saudi Arabian commercial real estate is being transformed by the e-commerce boom, especially, in logistics and warehouse segments. Online selling has become rampant and developers are transforming abandoned factories into contemporary fulfillment centers. With tax holiday of 50 years and 100 percent foreign ownership the Integrated Logistics Bonded Zone has attracted companies such as DB Schenker to expand distribution centers. In Riyadh in the prime eastern regions, industrial rents have increased to 215 dollars per square meter annually. Delivery rates are also being reduced in half by the government with a 4.5 billion investment made in King Abdullah Economic City maritime upgrades which has caused the demand in warehouses to grow. The development of this industry is associated with the consumer trend, and retail sales will reach almost 178 billion dollars in 2024. Due to the further expansion of e-commerce, the realization of logistics facilities is the hottest investment and leads to the diversification of real estate.

Emerging Trends in the Saudi Arabia Commercial Real Estate Market

• Rise of Mixed-Use Developments

Mixed-use is emerging throughout Saudi Arabia, where the retail, office, and residential environments are developed to create entire communities in one place. Such developments as King Abdullah Financial District in Riyadh and The Avenues Mall in Khobar are some of the most obvious ones, providing high-end offices, luxurious shopping, and elite residential. In response to the hunger of Riyadh residents to have convenient forms of living, 5.2 million square meters of office space will be supplied in Riyadh in 2024 alone. They are equally adopting the principle of green building such as energy efficient designs, which conforms to the world sustainability trend. Another gem is the $20 billion Jeddah Gate by Emaar which will provide 230,000 square meters of quality office space. These developments are reimagining the city life attracting investors and tenants who seek the new, connected places.

• Surge in Hospitality and Tourism-Driven Real Estate

An explosion of hospitality real estate is driven by Saudi Arabia as they plan to become a tourism destination on the global map. The ambitions of the government to recruit 70M foreign tourists by 2030 trigger the megaprojects such as NEOM and The Red Sea Projects, where hotels, resorts, and retail premises are being built. The hospitality industry experienced a growth of 4 percent and 15 percent increase in income per available room in Makkah and Medina respectively in the year 2024. Eight hundred billion dollars have been allocated to tourism by the year 2023, and such developments as Expo 2030 and the FIFA World Cup 2034 are stimulating hotel building. The data provided by STR indicates that Saudi Arabia is on the top of the hotel supply growth worldwide. This is bringing in employment opportunities and increasing demand of commercial premises and most of all in tourist dense cities.

• Adoption of Smart City Technologies

In Saudi Arabia, smart city technology is changing commercial property into a more available, efficient package that is more appealing. NEOM is establishing the bar in using AI planning of the city and blockchain to ensure transparent transactions. Buildings with IoT are maximizing energy consumption, with developers using renewable energy, and technologies saving water. Digital options in 2024 such as the Ejar rental system made leasing more transparent, and this benefited landlords and renters. Property companies also use AI and its data analytics to monitor market and differentiate offers and 85 percent of urban houses evolve with integrated smart tech. Those innovations are attracting technologically savvy investors and tenants, making Saudi Arabia a world leader in innovative, green real estate development.

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Saudi Arabia Commercial Real Estate Industry Segmentation:

The report has segmented the market into the following categories:

Type Insights:

• Offices
• Retail
• Industrial
• Logistics
• Multi-family
• Hospitality

Regional Insights:

• Northern and Central Region
• Western Region
• Eastern Region
• Southern Region

Competitive Landscape:

The market research report has also provided a comprehensive analysis of the competitive landscape in the market. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided.

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Future Outlook

The commercial real estate market in Saudi Arabia is currently on the tip of a booming growth as the ambitious reformation of Saudi Arabia according to vision 2030, as well as the mega-projects such as NEOM, Qiddiya, and The Red Sea, all have a strong growth perspective. As demonstrated by the 98 percent occupancy levels in Riyadh city offices and a projected retail sales of $178 billion by 2024, the demand of commercial space will remain high. The market will remain vibrant under the government initiative to ensure that 70 percent of people become home owners and inject $388 billion foreign investment by 2030, but costs of construction are on the increase and there is the threat of over supply in certain cities. New logistics and hospitality growth will be promoted by E-commerce and tourism and further developed by smart tech and sustainability. The biggest giants such as Emaar and SEDCO are growing, and now that such events as the FIFA World Cup 2034 are on the horizon, the sector is looking quite prosperous and promising.

Research Methodology:

The report employs a comprehensive research methodology, combining primary and secondary data sources to validate findings. It includes market assessments, surveys, expert opinions, and data triangulation techniques to ensure accuracy and reliability.

Note: If you require specific details, data, or insights that are not currently included in the scope of this report, we are happy to accommodate your request. As part of our customization service, we will gather and provide the additional information you need, tailored to your specific requirements. Please let us know your exact needs, and we will ensure the report is updated accordingly to meet your expectations.

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