Riyadh R. Estate Show Vigorous Prospects, Redrawing MENA Map -Knight Frank Envision

The real estate market in the Saudi capital is expected to show much more momentum, as mo than 40 international companies decided to make Riyadh their regional headquarters, with the city turning into an attractive investment hub.
Yet, no figures to determine the increase so far, in response to a question about the expectations of real estate market growth, after the licenses granted by Saudi Arabia to companies to establish regional headquarters, in Riyadh.
“Knight Frank” real estate consultancy giant, has said in a report recently issued that the Saudi government’s program to stimulate companies’ move to Riyadh by the end of 2024, known as “Program HQ”, is expected to contribute to redrawing the future economic map, in the Middle East for the better.
“The growing demand for Class A luxury offices, in Riyadh, has led to increase in rental prices, in this category by 2.9%, in the last 12-months to the end of the third quarter of the year,” Faisal Durrani, Head of Middle East Research, at Knight Frank.
Looking forward, Knight Frank expects the demand for Class A office space to increase, because the global companies will not settle for anything less, according to the report.
“It is clear-cut that the decision to make Riyadh a regional competitor, is based on special considerations, such as the quality and quantity of available office space, access to world-class skills, and the difference in taxes levying, Durrani explained.
The VAT in Saudi Arabia is 15% compared to only 5% in Dubai and the UAE, as a whole, which will increase costs on business and living costs, but despite that, Saudi Arabia is the largest economy, in the region, and its population is 35 million, which indicates that the region accommodates much more than a sole business center.
Did you visit Riyadh recently? The boom is already happening…a lot of friends, who are of many nationalities, will move there,” one of the Saudi executives told CNN, in Arabic.
In response to a question about the transfer of Siemens employees to Riyadh, a spokesman for Siemens, which owns Siemens Transportation, said: “The location (of Siemens Transportation headquarters) has not been determined yet, however the regional headquarters (in Riyadh) will include activities, covering the countries across the Gulf.
A source told CNN, in Arabic, that what is unquestionable is that the number of employees, who will move to Riyadh, will increase with the new projects that are yet to be announced.
Regarding the recent rise in real estate prices, in Saudi Arabia, “Real estate prices in Saudi Arabia have recently risen as a result of several factors, including reforms in the mortgage system, which allowed Saudis to obtain financing for buying homes and improving the real estate sector’s legislation, from a regulatory point of view, which encouraged investors and developers. In addition, there are the new government set of policies that have been recently implemented, accelerating the increase, in demand for housing.”
In a previous report by “Knight Frank” last week, the company indicated that apartments prices, across the Kingdom have risen, at the fastest pace since 2016, as a result of the state’s plan to increase the proportion of housing ownership, for the Saudi families.
The increase in housing ownership is part of the Economic Transformation Program of Vision 2030, to diversify the economy, which aims to raise nationals’ ownership percentage to 70%, by 2030, via building housing for the most needy groups and providing subsidized loans to the citizens.
Real estate prices in both Riyadh and Jeddah posted record increase last year, by 17% and 12%, respectively, according to the report.