Saudi Arabia Commercial Real Estate Market Report and Forecast 2032

Saudi Arabia Commercial Real Estate Market Insights & Analysis

The Saudi Arabia Commercial Real Estate Market reached a value of nearly USD 71.4 billion in 2024. The market is assessed to grow at a CAGR of around 4.1%, during the forecast period of 2025-2032 to attain a value of around USD 91.87 billion in 2032. The term "commercial real estate" is regarded as the properties that generate revenue for enterprises, like office shopping malls, buildings, warehouses, industrial facilities, and mixed-use improvements. Ownership, leasing, or progression of these infrastructures is done to earn money via business activities, property appreciation, or rental income. Moreover, applications are found across a broad range of industries, such as medical facilities, retail stores, corporate offices, logistics hubs, hospitality venues, and special economic zones.

Also, the Saudi Arabia Commercial Real Estate Market is growing swiftly owing to government programs, great infrastructure projects, and Vision 2030's intention to diversify the economy. Along with this, international tourist e-visas have also been presented by the Saudi government as part of Vision 2030 to improve travel & raise the country’s competitiveness globally. This would have a favorable influence on the Kingdom's Commercial Real Estate Industry.

The rising prevalence of e-commerce affects enterprises as well as they require flexible & effective facilities for distribution, retail, and warehousing to satisfy customer needs for fast delivery & enhance shopping experiences. Commercial real estate is also more sustainable & practical due to technical developments in design, construction, and building management systems, which demand both developers & buyers.

Furthermore, the economy outside of oil augmented by nearly 6.2% annually, while the oil sector grew by about 9%. The Saudi Arabia Commercial Real Estate Market is foreseen to witness elevated demand owing to the government's ongoing investment in giga-projects & the expanding entertainment sector.

Also, most commercial real estate markets observed mild conditions in 2022, although the hospitality sector experienced varied substantial advancements announcements. The country is at the top of the global hotel supply expansion list, as per STR data.

Besides, the rapidly developing industries include hospitality & retail, which are being pushed by an uptick in international brands, retail diversity, and tourism. The augmentation of business conditions is also driving the corporate need for Grade A office space, which is elevated by noteworthy projects, such as King Salman Energy Park and Riyadh's metro system.

Also, the advancement of King Abdulaziz International Airport is encouraging aggregating commercial real estate spending in primary cities, such as Riyadh, Jeddah, Makkah, and NEOM. This is in line with Saudi Arabia's ambitious objectives to welcome about 100 million tourists yearly by 2030.

Additionally, the office sector in Saudi Arabia's main regions continued to face some pressure. However, as the nation's economy improves, it is anticipated that corporate requirements would elevate in the medium to long term. This is because of a number of new projects, like the King Salman Energy Park (SPARK) in Dammam and the 176.7 km metro in Riyadh, which would further assist in stimulating the Saudi Arabia Commercial Real Estate Market expansion during 2025-32.

Recent Progression & Developments in the Saudi Arabia Commercial Real Estate Market

• 2024: The Red Sea Project, a nearly USD 15 billion striving to turn around 90 isolated islands into an opulent vacation destination, was still being established by Red Sea Global. The project, which places a strong prominence on sustainability, intends to offer upscale lodging, marinas, golf courses, and cultural institutions while protecting around 75% of the natural environment.
• 2025: Under the leadership of Prince Alwaleed bin Talal, Kingdom Holding Company declared in early 2025 that it has aligned strategically with an international association to build a mixed-use tower in Riyadh. This project aims to solidify Riyadh's standing as a major global economic hub.
• 2025: SIG capitalized in the leisure & healthcare industries to expand its holdings. In line with Saudi Arabia's Vision 2030 objectives, the company announced that it would build a luxury resort & a cutting-edge medical facility in the Eastern Province.

Saudi Arabia Commercial Real Estate Market Dynamics

Drivers Impacting the Saudi Arabia Commercial Real Estate Market Shares

• By striving the economic diversification, Vision 2030 aims to achieve initiatives, such as The Red Sea Project and the NEOM City projects across the country, further driving market growth.
• Expansion in the hospitality & retail industries due to relaxation in regulations on dining establishments, entertainment, and movie theaters, creates a demand for more commercial spaces.
• The demand for residential & commercial real estate has elevated owing to rapid urbanization & population progression. Further, to handle this growth, substantial urban projects are being established, like Riyadh's New Murabba project.
• Green construction standards & eco-friendly designs are being accepted in commercial premises as a result of the amplified focus on sustainability, hence further creating new profitable prospects for the Saudi Arabia Commercial Real Estate Market.

Challenges Impeding the Saudi Arabia Commercial Real Estate Market Growth

• Time-consuming & complicated regulatory procedures might discourage investment & cause commercial infrastructure project schedule delays.
• Government policies, supply-demand disparities, and economic variations could cause property values to alter, making it challenging to improve market revenue returns.
• Some rules still present complications for foreign investors despite reforms, which might hamper the flow of foreign capital.
• Developers face varied impediments owing to increasing land, material, and labor expenses as well as a limited capacity for building.
• The expansion of the Saudi Arabia Commercial Real Estate Market would be considerably impacted by increasing geopolitical tensions between countries in varied regions.

Saudi Arabia Commercial Real Estate Market Segment-wise Analysis

By Type:

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

The biggest share of the Saudi Arabia Commercial Real Estate Market is captured by the Retail Spaces segment and is anticipated to follow a similar trend in the forecast years as well.

In regions like Riyadh, retail real estate is promptly altering, with a wide variety of establishments ranging from fast-food restaurants to luxury labels. Retail venues witnessed an uptake in foot traffic when the government relaxed its prohibitions on cafes, restaurants, and movie theaters. Also, shopping malls are increasing their food & beverage and entertainment sections to better serve their patrons as e-commerce flourishes. Further, the retail Gross Leasable Area (GLA) in Riyadh reached approx. 3.3 million square meters in Q3 2022, concerning Lumiere Centre & other advancements fueling the industry. Also, the growth of the segment is being driven by high-quality shopping malls that draw a broad range of consumers.

Moreover, it is also presumed that the Offices segment will expand tremendously owing to the construction of first-rate office space in the upcoming years, thus contributing to enhancing the market share.

What Does Our Saudi Arabia Commercial Real Estate Market Research Study Entail?

• Saudi Arabia Commercial Real Estate Market Research Report highlights the forecast growth rate or CAGR by anticipating the market size & share.
• The market analysis puts light upon the primary industry trends, driving aspects, potential opportunities, growth challenges, and other major factors.
• Saudi Arabia Commercial Real Estate Market Research Report entails details about the most critical shifts in market share in the prominent regions.
• Considering the statistics & the developments by the primary market competitors, our report also strives to demonstrate the most sought-after strategies of the key players.