The fourth quarter of 2025 saw a shift in the narrative towards a more delivery‑focused era for Saudi’s real estate market, with project rationalisation and rephasing now becoming apparent, as government investments refocused to Expo and other major drivers, says a CBRE Middle East report.
CBRE Middle East, a global leader in commercial real estate, released today its Q4 2025 Saudi Arabia Real Estate Market Review, highlighting a decisive shift in the Kingdom’s growth narrative as the economy moves from regulatory groundwork to accelerated execution.
Real GDP expanded by 4.8% year‑on‑year in Q3 2025, supported by strengthening oil activity and a resilient non‑oil sector, while inflation continued to ease and net foreign direct investment surged by 34.5% over the same period.
Regulatory advances, particularly the finalisation of the Foreign Ownership Law and the launch of the Saudi Properties digital portal, played a fundamental role in guiding market sentiment, the report said.
By channeling overseas demand into designated high‑growth districts while maintaining affordability for Saudi households, these reforms have created a more structured, future‑ready investment environment.
The Kingdom’s capital markets are also opening more widely to international participation, with the Saudi Exchange welcoming all foreign investors from February 2026, easing QFI requirements and deepening liquidity across sectors.
The Office market continued to demonstrate exceptional strength, led by the surge of multinational activity through the Regional Headquarters program, which is now understood to have surpassed 780 licenses. Grade A occupancy in Riyadh is approaching capacity, reinforcing the emergence of a pre‑leasing culture as occupiers look to secure future space amidst acute supply constraints. Prime rents in districts such as the King Abdullah Financial District (KAFD) continue to hit new heights, supported by sustained demand and supported by ongoing transport integration, which is elevating the appeal of KAFD’s premium commercial spaces.
Residential performance reflected a period of healthy rebalancing. Increased delivery, particularly in Riyadh, which is set to welcome approximately 70,000 units over the next two years, has moderated price growth and pushed the market toward greater stability. While transaction activity has softened as stakeholders assess the implications of the new foreign ownership framework, Jeddah remains a standout performer, recording rising volumes. Large‑scale community developments, including Al Fursan and key projects within ROSHN’s portfolio, are reinforcing the sector’s long‑term depth. Looking ahead, the implementation of the new foreign ownership law in January 2026 is expected to be a major catalyst for activity within designated residential investment communities.
Retail continued its transformation into a more experiential, lifestyle‑driven sector. Construction progress at super‑regional destinations, such as The Avenues Riyadh and Westfield Riyadh underscores a national pivot toward mixed‑use, pedestrian‑first hubs that integrate luxury, leisure, food and beverage, and digital experiences.
With mall rents stabilising and POS (Point of Sale) data indicating strong performance in F&B and e‑commerce channels, the sector is evolving into a diversified ecosystem that supports both physical and online consumption.
Hospitality market
The Hospitality market navigated a softer performance cycle as new supply influenced occupancy levels, yet the broader tourism ecosystem continued to strengthen. Total tourism spending for H1 2025 reached SAR161.4 billion, while major infrastructure milestones, including the full operational launch of Red Sea International Airport and the opening of Six Flags Qiddiya City, are expected to stimulate demand in emerging destinations.
Luxury and branded hospitality remain key themes, highlighted by the Four Seasons and Trump International announcements in Diriyah, alongside major premium residential offerings in Makkah’s Masar Destination.
Industrial & Logistics remained in strong demand, supported by rapid e‑commerce growth, smart logistics partnerships and a national logistics strategy attracting substantial private investment. Accordingly, industrial rents continued their upward trajectory across Riyadh and Jeddah, while major new agreements, such as the planned development of 2 million square metres of smart logistics assets in the Golden Triangle, are positioning the sector for sustained expansion.
Matthew Green, Head of Research at CBRE MENA, commented: “Saudi Arabia has now entered a pivotal phase in its transformation journey, where the foundations laid over recent years are translating into visible progress and substantial economic impact.
"The combination of structural reforms, disciplined fiscal strategy and unprecedented project execution is creating a real estate environment defined not only by scale, but by maturity and long‑term resilience.
"As international capital flows deepen and delivery accelerates across residential, commercial, retail, hospitality and industrial sectors, the Kingdom is firmly positioning itself as one of the most compelling global markets of the next decade.” - TradeArabia News Service
