Riyadh office demand rises after headquarters ultimatum
DUBAI, Nov. 9 (Reuters) – Demand for high-quality offices in Riyadh increased after Saudi Arabia said foreign companies would have to move their regional headquarters there in order to do business with the kingdom, the consultant said. real estate Knight Frank in a report.
Saudi Arabia, the world’s largest oil exporter and largest Arab economy, said in February it would give foreign companies until the end of 2023 to set up their headquarters in the country or risk losing government contracts, a measure aimed at attracting investment and generating jobs for the Saudis.
“Rising demand for Class A office space in the Saudi capital, Riyadh, has unsurprisingly put upward pressure on rental rates for Class A office space, which rose 2.9 percent in the past. during the 12 months leading up to the end of the third quarter of 2021, “said Knight Frank.
Saudi Arabia last month said it had allowed 44 international companies to establish a regional headquarters in the capital. Read more
In a separate report released this week, real estate consultancy CBRE said workplace visits to Saudi Arabia during the third quarter exceeded its baseline before the pandemic, according to mobility data from Google .
He predicts that the supply of office space in Riyadh will increase by 8.1% this year.
The Saudi siege’s ultimatum, as part of Crown Prince Mohammed bin Salman’s efforts to wean the economy off oil by creating new industries, put the kingdom in competition with the regional business center – the United Arab Emirates.
“Obviously, the decision to position Riyadh as a regional rival to Dubai comes with its own considerations,” Knight Frank said, citing issues such as the quality of available office space as well as tax differences.
“Despite this, Saudi Arabia is the region’s largest economy with a population of around 35 million, which strongly suggests that there is room in the region for more than one business hub.” , said the consultant.
Reporting by Davide Barbuscia; Editing by Sherry Jacob-Phillips
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