Riyadh Prime Office Occupancy Hits 97% in 2026

Riyadh's premium office market has become the tightest in the Gulf, with prime occupancy reaching about 97% in the second quarter of 2026, driven largely by the Regional Headquarters (RHQ) Program and a limited supply of new top-grade buildings.

City-wide Grade A occupancy climbed even higher, reaching roughly 98% to 99% between late 2025 and early 2026, while prime vacancy narrowed to around 0.5%. Analysts describe the capital's office sector as effectively full, with landlords holding a strong position amid persistent demand.

The squeeze on space has pushed rents sharply upward. Prime Grade A office rents in Riyadh rose about 23% year-on-year in the first quarter of 2025, reaching around SAR 2,700 Rents kept climbing through the year, with prime levels reported at approximately SAR 3,630

Why demand keeps rising

Much of the pressure stems from the Regional Headquarters Program, which requires multinational companies serving the Saudi public sector to base their regional headquarters in the Kingdom by 2026 to remain eligible for most government contracts. The program offers qualifying firms a 30-year exemption from corporate income tax and withholding tax, along with additional discounts and support services.

The response has exceeded expectations. By early 2025, more than 600 companies had announced plans to set up regional headquarters in Riyadh, surpassing the original Vision 2030 target of 480 by 2030. By mid-2025, licensed regional headquarters in the capital had grown to roughly 540 to 634, with new licenses still being issued.

For residents and businesses, the near-full market means higher costs and fewer options for premium space in the short term. Riyadh's total office stock reached about 5.5 million square metres by the end of the first quarter of 2025, and further completions are planned through 2027 to ease pressure on occupancy and rents.

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