Saudi Arabia's commercial property sector sees new record high for investment sentiment in Q3, thanks to the demand for offices which continues to accelerate particularly strongly with net balance demand reporting a +73%, according to The Royal Institution of Chartered Surveyors (RICS). 

 

The topline overall Occupier Demand figure reported a +60% figure – marginally up from the +59 result in the previous quarter. Demand for offices continues to accelerate particularly strongly with net balance demand reporting a +73%, which is up from +62% in Q2, it stated.

 

Saudi Arabia continues to deliver robust Occupier Sentiment Index (OSI) and Investment Sentiment Index (ISI) readings (+26 and +39, respectively), with the latter series posting a fresh record high across the nation since the ISI for Saudi Arabia began in Q4 2018, noted its Q3 2023 Global Commercial Property Monitor while Saudi Arabia’s market continues to present a rosy picture..

 

Development starts reported rises, with the overall figure rising to +77% – another record high since 2018 and up significantly from the +36% recorded in the prior quarter. Every sector is contributing to the rise in development starts, but the retail sector in particular is leading the pack, responding with an exceptional +92% reading, rising from +38% last quarter.

 

Looking to the future, the outlook remains stable. Overall three-month capital valuations were up a touch from +72% to +75% this quarter, while overall twelve-month rent expectations softened a little from +74% to +65%, rental expectations in the office sector strengthened to +90% from +77% in the previous quarter.

 

In the anecdotal responses to the monitor, a respondent relays an exceptionally positive atmosphere towards Riyadh’s commercial property market, while another reported the increased role that prime office space is contributing to this positive picture.

 

Practically all metrics for Saudi Arabia’s commercial property market are in solidly positive territory, reflecting an exceptionally strong and stable market with a positive future outlook. The impact of the Kingdom’s “Giga Projects” continues to make their mark in the monitor results, cementing the nation’s commercial property sector as one of the world’s leading lights.