Saudi Arabia: Real Estate and Tourism Boom

Saudi Arabia's commercial real estate and tourism sectors are experiencing unprecedented growth, with office rents and hotel revenues reaching record highs in early 2025. Driven by increasing foreign investment and the establishment of global businesses, Riyadh's office rents surged 23% year-on-year, reaching SAR 2,700 per square meter, with occupancy rates at a near-perfect 98%. Jeddah is also emerging as a key business hub, boasting 95% office occupancy and significant developments in the pipeline.

This surge is fueled by government initiatives like the Regional Headquarters Programme, offering substantial tax incentives to attract foreign firms. Over 600 global companies have announced regional headquarters plans in Riyadh, and the number of foreign business licenses issued jumped 67% in 2024. The Kingdom welcomed a record 30 million international visitors in 2024, aiming for 70 million by 2030, further boosting the hospitality sector.

Hotel performance reflects this upward trend, with Makkah's revenue per available room (RevPAR) surging 35.7% and average daily rates (ADR) reaching SAR 859. Madinah also saw strong growth, with the highest ADR in the country at SAR 891. Large-scale tourism projects are expanding capacity and enhancing guest experiences around key religious sites.

Beyond real estate and tourism, Saudi Arabia is rapidly developing its data center infrastructure, targeting a market size of US$3.2 billion by 2029. Major cloud providers, including AWS, Microsoft, Oracle, and Google Cloud, are expanding operations, with the Kingdom's IT capacity expected to quadruple by 2030. This positions Saudi Arabia as a leading digital economy and a global AI superpower, supported by initiatives like the US$100 billion Transcendence AI program.