Saudi Arabia’s real estate market is positioned for substantial growth in 2025, driven by Vision 2030 and strategic economic diversification, according to a comprehensive market review by JLL.
The Kingdom’s non-oil sector is projected to grow by 5.8 per cent in 2025, up from 4.5 per cent in 2024, underpinned by significant infrastructure investments and private sector engagement.
“Despite global economic headwinds, the resilience and strategic diversification efforts in Saudi Arabia driven by Vision 2030 are a significant catalyst for real estate development, attracting both domestic and international capital. The flight to quality, limited vacancy in prime assets, and ambitious tourism strategies are further bolstering sustained demand across key sectors, particularly in Riyadh and Jeddah, creating a compelling investment landscape for the long term,” Saud Alsulaimani, Country Head of JLL in Saudi Arabia said.
Construction remains a robust sector, with Saudi Arabia accounting for $29.5 billion in project awards in 2024.
Diversification fuels real estate
The hospitality, mixed-use, and leisure segments demonstrated significant activity, with the residential sector securing $7.9 billion in awards.
Riyadh’s office market emerged as a standout performer, with Grade A buildings registering a mere 0.2 per cent vacancy and average rents reaching $609 per square metre in Q4 2024. The city anticipates an additional 888,600 sq m of office space in its pipeline for 2025.
The residential sector continues to show strength, with villas comprising 53.3 per cent of total transactions in Riyadh. Jeddah’s market sees apartments dominating, representing 82.8 per cent of anticipated units for 2025.
Hospitality sectors in Riyadh and Jeddah are experiencing growth, driven by corporate tourism, global events, and religious tourism.
Riyadh’s Average Daily Rates surged 13.3 per cent to $239 in 2024, with 2,312 new hotel keys expected in 2025.
Retail landscapes are transforming, with a shift towards experiential formats. Open-air boulevard-type retail is gaining popularity, while traditional mall concepts face challenges. Community malls showed a 5.5 per cent growth, contrasting with regional malls experiencing a 9.3 per cent annual decline.
The industrial and logistics sectors demonstrate strong market activity, with upward rental rates in both Riyadh and Jeddah. This growth is fuelled by economic diversification and e-commerce expansion.
“Strategic projects that underpin Saudi Arabia’s Vision 2030 will continue to attract substantial investments, creating new opportunities for market expansion. Significant cash flow is anticipated for major events like the FIFA World Cup 2030 and EXPO 2030, further boosting infrastructure development and positioning the real estate sector for robust performance and positive growth in 2025 and beyond,” Maroun Deeb, Head of Projects and Development Services for JLL in KSA added.
The data centre landscape is also expanding, with Saudi Arabia ranking third in live colocation facilities and contributing 12.6 per cent of the region’s operational IT load capacity by 2024’s end.
As the Kingdom prepares for major events from 2025 to 2028, it continues addressing challenges through localisation efforts, infrastructure investment, digital transformation, and a focus on sustainability.
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