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Riyadh’s top tenant is still the Public Investment Fund. But growing demand from foreign companies and increased interest in warehouses and data centers is adding momentum, according to Knight Frank.
Premium office space is nearly fully occupied in the Saudi capital, according to a report from the US property firm. PIF-backed companies, subsidiaries, and joint ventures that in recent years have popped up by the dozens — including Riyadh Air, Lucid Motors, and Savvy Games Group — are taking up most of the space, Amar Hussain, associate partner for research at Knight Frank MENA, told Semafor.
“You have these entities coming in and locking entire floors at rates most companies can’t match,” he said, adding that some deals are being signed before buildings are even complete.
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Also driving demand is Saudi Arabia’s Regional Headquarters Program, which requires foreign firms to relocate their regional hubs to Saudi Arabia by 2026 in order to qualify for government contracts.
Over 600 multinational companies have either already done so, or stated their intention to relocate to Riyadh, and the kingdom issued around 14,300 foreign investment licenses in 2024, reflecting a wave of new market entrants.
Warehouse rents in Riyadh during the first quarter of 2025, meanwhile, jumped 22% compared to last year, real estate firm JLL data showed, as supply lagged behind demand fueled by growing e-commerce and logistics growth.
Saudi Arabia’s data center footprint is also expanding fast: Knight Frank projects the market will double to $3.2 billion by 2029. The growth is tied to rising demand for cloud storage, digital infrastructure needs, and government bets on automation.
Recent moves by Alibaba, Amazon Web Services, and Google to establish cloud services signal growing interest from global tech firms and the launch of PIF’s HUMAIN, an AI subsidiary, is part of that shift.
Notable
- Companies like Boeing, PepsiCo, PwC, and Unilever have heeded the regional headquarters push to secure government contracts, the Financial Times reports, although large banks have largely held back.
- Riyadh said last year it had exceeded its target for attracting foreign companies to set up regional headquarters in the kingdom. Many companies say, however, that the process is mired in confusion, Semafor’s Kelsey Warner reported.