$290m fund set up to develop Riyadh business park

Creative Commons/Tflanagan

• Office space in high demand
• New park at King Saudi University
• Global companies considering kingdom

A $290 million fund has been set up in Saudi Arabia to develop a new business park in Riyadh as the city struggles to meet growing demand. 

Ezdihar Real Estate Development Company and Al-Istithmar Securities and Brokerage Company, the investment arm of the Saudi Investment Bank, said the fund will focus on a 103,000 sq m plot on the King Saud University campus. 

Few details about the project have been unveiled but it is planned as a Grade A office park described as “setting a new standard for modern business environments”.

---

---

Ezdihar also aims to provide 1 million sq m of gross leasable land and 2,000 residential units for sale by 2030.

Riyadh is trying to meet growing demand for high-quality office space amid a drive to entice companies to set up regional headquarters inside Saudi Arabia and attract more foreign direct investment. 

Office space has increased in recent years as part of Saudi Arabia’s vast economic transformation plan, which aims to double the capital’s population to 14 million over the next decade. 

• Looming deadline sees scramble for Riyadh offices
• Foreign HQs drive Riyadh rent growth to record highs
• Seera Group invests $160m in Riyadh business park

The drive to attract more companies seems to be working. 

In February, AstroLabs, a company that advises businesses on entering Saudi Arabia and the UAE conducted a survey of 660 companies described as high-growth from more than 50 countries. It found more than two-thirds were considering expanding into Saudi Arabia.

Of the 450 companies across 37 sectors looking to move into the kingdom, half plan on doing so within the next six months, the poll found.

But according to global property consultancy Knight Frank, only 100,000 sq m of supply entered the Riyadh market during the first half of 2023, increasing the city’s supply to 5.2 million sq m. 

Ezdihar

Occupancy rates for Grade A offices in Riyadh have reached 100 percent while the Grade B rate stood at 99.4 percent, consultancy CBRE’s latest figures show. 

In Jeddah, occupancy rates are up to 92.5 percent and 82.1 percent respectively while Dammam and Khobar registered Grade A rates of 84.2 percent and 83.6 percent. 

“On the whole, demand in Saudi Arabia continues to severely outpace supply across almost all real estate market sectors, hence, we have seen relatively strong levels of performance in 2023,” said CBRE’s head of Mena research, Taimur Khan.