Saudi Office Rents Rise as Riyadh Seeks to Draw Global Firms
Saudi Office Rents Rise as Riyadh Seeks to Draw Global Firms
(Bloomberg) -- Rents for premium office space in Saudi Arabia rose this year, spurred by the kingdom’s push to attract global firms and compete with regional business hub Dubai.
Rents for offices in top locations in Riyadh have risen 2.9% in the past 12 months, according to data from global property consultant Knight Frank. The world’s largest oil exporter wants companies to move their regional headquarters to the kingdom as it seeks to diversify its economy.
In October, more than 40 global companies including Baker Hughes Co., KPMG and Schlumberger received licenses to open their regional headquarters in Saudi Arabia. The policy pits Saudi Arabia against long-term ally and neighbor the United Arab Emirates, home to the well-established Middle East travel and finance hub of Dubai.
Firms that move to Saudi Arabia will get exemptions from work visa limits, eased regulations, and help with the relocation of staff under a new program to facilitate business. Saudi Arabia has said companies which do not move their regional headquarters by 2024 will lose out on government-linked contracts.
The draw of Riyadh has meant that rental space in secondary locations across the kingdom has fallen by between 1% and 3% over the last 12 months, the report said.
“Inadvertently, businesses from elsewhere in the Kingdom are also opting to relocate to the capital, which is undermining office markets elsewhere in the country,” said Faisal Durrani, head of Middle East research at Knight Frank, predicting that the trends would continue.
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