In Riyadh, demand for office space for small businesses is growing.
According to CBRE, total office stock in Riyadh’s capital stood at 4.2 million sqm of gross leasable area by the end of 2018. In addition, 870,000 sqaure meters expected to delivered by 2022.
Goverment led initiatives aimed at stimulating private sector growth and promoting a spirit of innovation and entrepreneurship in line with Vision 2030. Market Snapshot for 2018 points out that a growing trend for office supply as part of mixed use development.
In Saudi capital, rents remain under pressure. While the first office rents in the market decreased by 4 percent, secondary office rents decreased by 7 percent. However, increased incentives and discounts by landlords can ease market declines.
Simon Townsend, head of strategic advisory at CBRE MENAT, said: “The recent economic and social initiatives and legislation introduced by the Saudi Government have already had an extremely positive impact on the country’s real estate sector.”
“Meanwhile, the increased government spending on large-scale infrastructure and mega-projects is expected to further stimulate the overall market, with a positive trickling-down effect on all key sectors,” he added.
With the increase in the entertainment industry in Saudi Arabia, corporate demand in Riyadh can also increase the hospitality sector. CBRE expects daily rates to remain under pressure.
According to CBRE’s Market Snapshot, more than 5,000 keys are expected to be delivered to the market by 2022. In the residential sector, CBRE estimates expected delivery of 130,000 additional units by 2022 to add to the existing inventory of about 1.25 million units.
Fulya Altunyay/ [email protected]