Saudi leads rental growth as office occupiers snap up prime space across the GCC

• Grade-A office rents in Riyadh surged by 15.1% year-on-year in Q3 2025 
• Rental growth in Dubai Silicon Oasis up 27% on Q2 
• Emerging markets in Industrial City, Mohamed Bin Zayed City and Musaffah outperform in Abu Dhabi 

Riyadh | 3 December 2025: Rising demand for prime, ESG-compliant office space among regional and global businesses is driving rents and occupancy levels to near-record highs across key markets in the GCC, according to the 2025 GCC Office Market Review from global property consultancy Knight Frank.  

The report reveals double-digit rental growth in Saudi Arabia, Dubai and Abu Dhabi, with recent developments, such as HB Tower on Yas Island, already close to full occupancy.  

Faisal Durrani, Partner – Head of Research, MENA, said: “Office markets across the region continue to remain undersupplied, with high levels of demand underpinning strong rental growth, notwithstanding nuanced differences between underlying market drivers across the GCC. Government initiatives and macro-economic diversification strategies are translating into strong non-oil GDP growth, which is in turn supporting real estate demand, particularly for office assets that meet modern corporate mandates around quality and ESG standards.  

“The shortage of office supply that has helped support the strong rental growth in many regional cities is however set to change, with a 60% increase in supply in Riyadh expected by the end of 2027 when total stock will exceed 10 million square metres, while in Dubai too, we are projecting a further 13.2 million square feet to be delivered by the end of 2030.” 

James Hodgetts, Partner – Occupier Strategy & Solutions, MEA, added: “The common thread across the GCC is the flight to quality, with blue-chip tenants and multinational firms prioritising premium, future-proofed office space, signalling enduring confidence in the region's economic stability and growth prospects”. 

RISING RENTS IN SAUDI ARABIA 

Saudi Arabia’s office market is experiencing an extended period of growth, fuelled by government-led investment, massive giga project activity and the Regional Headquarters (RHQ) Programme. The demand for grade-A, ESG-aligned office environments is accelerating across Riyadh, Jeddah and the Dammam Metropolitan Area, creating a market characterised by rising rents and supply shortages. 

Riyadh remains the corporate heart of the Kingdom. Grade-A rents in the capital surged by 15.1% year-on-year in Q3 2025 to an average of SAR 2,750 psm, while rents for grade-B space were up 16.5%.  

Hodgetts continued: “The scarcity of prime space is evidenced by near-full occupancy rates: grade-A buildings average 98% occupancy, with grade-B spaces averaging 95%. A key driver of this shortage is rapid corporate expansion, with more than 780 multinational firms announcing plans to establish regional headquarters in Riyadh under the RHQ programme. Companies from the US (41%), UK (19%), China (8%) and Germany (4%) are leading this trend”. 

Riyadh continues to lead with strong demand for grade-A space, driven by Vision 2030 and the RHQ initiative. Clients are prioritising quality, long-term positioning and strategic consolidation, especially among multinational and government-backed entities. The rise in rents for both grade-A and grade-B office space is a clear indicator of the enormous pressure on existing stock, forcing some occupiers to consider secondary options. 

Amar Hussain, Associate Partner – Research, MENA, said: “A key recent development in Riyadh is the new five-year rent freeze policy, introduced following an 86% rise in grade-A rents since 2019. While this aims to shield existing occupiers from further sharp uplifts, grade-A rents experienced a 10%-15% surge in some prime locations immediately preceding the announcement, reflecting market anticipation.” 

Jeddah's office market is also gaining strength, Knight Frank says, driven by new masterplans and landmark projects such as the US$1 billion Trump Plaza Jeddah, expected in 2029. Occupiers here are displaying more measured activity, focusing on value-driven decisions and flexible lease structures. Grade-A rents saw a modest 1.3% year-on-year increase in Q3 to SAR 1,251 psm, with occupancy at 92%.  

Hussain continued: “Saudi Arabia’s aggressive reform agenda, underscored by the RHQ programme and giga project mobilisation – accounting for US$196bn in awarded construction contracts since 2016 – has created an intensely competitive environment for grade-A space. Looking ahead, total office stock across Riyadh, Jeddah and the DMA is projected to increase from 9.7 million sqm in 2025 to 15 million sqm by 2028, with Riyadh accounting for nearly half of this upcoming supply. However, the near-term outlook is characterised by scarcity and rent escalation.” 

DUBAI’S DEMAND-DRIVEN LANDSCAPE 

Dubai’s office market is characterised by exceptionally high demand, particularly within the business services sector, which accounted for 41% of total demand in the first nine months of 2025, followed by the technology sector at 31%, according to Knight Frank. 

The market witnessed a slight increase in both new and renewed rental contracts in Q3 2025. Prime locations, especially the DIFC, command premium pricing, with shell-and-core spaces averaging AED 425 psf, buoyed by limited availability. Emerging submarkets such as Downtown Jebel Ali and Dubai Silicon Oasis also showed robust rental growth, up 20% and 27% quarter-on-quarter, respectively. 

Looking ahead, Dubai's cumulative office supply is projected to expand considerably, with total gross leasable area set to increase by 13.2 million sqft by 2030. The DIFC alone is forecast to add more than 3.3 million sqft of new office space. Crucially, the build-to-rent model is gaining traction, signalling a long-term strategy by developers to build and hold assets for sustained rental income. 

ABU DHABI’S SHIFTING MARKET 

Abu Dhabi’s grade-A office leasing rates increased by 28% year-on-year in Q3 2025 to AED 2,300 per sqm, driven by strong demand and limited new prime supply. Market demand is being led primarily by the business services sector (22%) and banking & finance (19%). 

Transaction activity has shifted away from established districts like Al Danah and Al Bateen towards emerging areas, notably Industrial City (up 412% quarter-on-quarter), Mohamed Bin Zayed City (+26%) and Musaffah (+23%), as tenants seek newer, higher-quality spaces. 

New supply, such as the 22,171 sqm Saas Business Tower and Aldar's now fully operational 12,004 sqm HB Tower on Yas Island, is beginning to enter the market. HB Tower is already at 98% occupancy. The supply pipeline is set to surge further in 2027, with nearly 175,000 sqm of new office space scheduled for delivery. 

QATAR 

Qatar’s office market is in a period of strategic consolidation, marked by a multi-year trend of occupiers migrating from West Bay to the modern, master-planned district of Lusail. While headline rents saw a moderate correction, down 2.2% year-on-year in Q3 2025, occupancy remains robust across premium assets. 

Lusail is rapidly establishing itself as the nation’s primary destination for institutional occupiers, particularly those seeking grade-A, ESG-aligned offices. The relocation of the Qatar Financial Centre to Lusail Boulevard in 2025 is a key signifier of this shift. Anchor tenants, including Qatar Central Bank, Qatar National Bank and the Qatar Investment Authority, are strengthening their presence in towers like Plaza/Al Sa’ad. 

Msheireb Downtown Doha too is also a popular location due to its integrated ecosystem and strong ESG appeal, attracting corporate and government occupiers including Qatar Airways and the Ministry of Environment & Climate Change. 

The country's long-term office demand is underpinned by the Digital Qatar Strategy 2030, which aims to advance the nation’s knowledge-based economy and create thousands of new ICT, data and e-governance roles, driving new office requirements through the end of the decade. Qatar’s total office stock currently stands at 6.5 million sqm of GLA, with a further 146,000 sqm of registered new projects that are due for delivery by 2027.