RIYADH: The real estate market in Riyadh is experiencing significant growth, with rents for Grade A office spaces rising 20.8 percent year on year in the third quarter of 2024, reaching SR2,131 ($567.31) per sq. meter. This increase reflects the city’s expanding economic activity, driven by both a thriving private sector and ongoing government initiatives aimed at positioning the capital as a global business and investment hub. According to JLL’s latest market analysis, this surge in demand for high-quality office spaces is contributing to a historic low in vacancy rates, which fell to just 1.6 percent in Q3 2024.

The report attributes the rise in office rents to the Kingdom’s economic diversification efforts, particularly the continued growth of the private sector in Riyadh.

The city remains an attractive destination for businesses and investors, with strong demand for Grade A office space in key districts. JLL also highlighted that Northern Riyadh, with its superior accessibility and high-quality developments, is increasingly favored by occupiers, driven by the area's efficient workspaces and ample parking, which help mitigate rising traffic congestion.

In Jeddah, Grade A office rents rose by 11.6 percent year on year, reaching SR1,338 per sq. meter, with a low vacancy rate of 3.7 percent. These trends reflect broader market strength across Saudi Arabia’s key cities.

Hospitality sector thrives

Saudi Arabia’s hospitality sector continues to see impressive growth, fueled by a combination of high-profile events and the Kingdom’s expanding tourism infrastructure. With events like Riyadh Season and AlUla Season drawing millions of visitors, coupled with the ongoing development of urban infrastructure, the Kingdom is solidifying its status as a leading global leisure and business destination.

According to the Ministry of Tourism, Saudi Arabia’s leisure tourism has skyrocketed by 656 percent since 2019, with 17.5 million international visitors arriving in the first seven months of 2024 alone.

This boom in tourism, supported by initiatives such as the streamlined tourist visa system and a growing entertainment sector, has boosted the Kingdom’s appeal as a global leisure destination. In fact, Saudi Arabia has already surpassed its original Vision 2030 target of attracting 100 million visitors and is now aiming for 150 million by 2030.

“The hospitality sector is set for continued expansion, driven by a packed events calendar and a steady influx of religious tourists,” said Saud Al-Sulaimani, country head of JLL Saudi Arabia. “These factors will fuel demand for accommodations and enhance occupancy rates in key cities.”

In Riyadh, the average daily rate for hotels increased by 19 percent year on year in Q3 2024, reaching SR736.3, while revenue per available room saw a 17.1 percent rise to SR440.3. Despite a minor dip in occupancy by 1.2 percentage points, these metrics reflect the growing strength of the hospitality sector. Jeddah, on the other hand, saw a 10.3 percent year-on-year decline in RevPAR, attributed to a 12.1 percent drop in ADR, although occupancy rates rose by 1.4 percentage points. Makkah and Madinah presented mixed trends, with RevPAR declining by 2.9 percent in Makkah, while Madinah saw a slight increase of 1.6 percent.

“Performance metrics in the hospitality sector are expected to improve as we approach the year's end, fueled by key events like the Riyadh and AlUla Seasons, as well as continued religious tourism,” JLL added.

Residential market growth

The residential markets in Riyadh and Jeddah also saw strong performance in the third quarter of 2024, driven by strong demand and shifting buyer preferences. In Riyadh, 4,000 new residential units were added in Q3, bringing the total stock to 1.46 million. Jeddah saw even greater growth, with 8,000 new units delivered, increasing its stock to 899,000 units.

Residential property prices in both cities also saw significant increases, with Riyadh experiencing a 12 percent year-on-year rise in sales prices, while Jeddah saw a 6 percent increase.

“This is an exciting time for Saudi Arabia, with unprecedented growth across multiple sectors,” said Al-Sulaimani. “The combination of soaring tourism numbers, rising hospitality revenues, and strong demand for residential properties is creating a dynamic environment that presents immense opportunities for investors and businesses alike.”

He added: “The Kingdom’s commitment to diversifying its economy is evident, and we are excited to see how these developments will shape our future.”

JEDDAH: Oman has launched new food security initiatives, partnering with government entities and the private sector to strengthen supply chain operations and enhance sustainability.

The scheme, announced by the sultanate’s Ministry of Agriculture, Fisheries, and Water Resources, reflects the Gulf state’s commitment to long-term food security and economic diversification as part of its broader development goals.

Food security is a top priority for Oman, particularly in light of the increasing risks that climate change poses to global supplies. 

The government has launched several initiatives, including the Food Security Strategy 2010-2020, which focuses on three key areas such as managing demand, boosting local production, and ensuring reliable imports, with specific goals to promote sustainable agriculture, rural development, and fisheries.

The country also launched the National Nutrition Strategy 2020-2030, introduced by the Ministry of Health in 2021, aligning with Oman’s Vision 2040. The initiative aims to improve nutrition, eliminate malnutrition, and enhance food security, which aligns with the World Health Organization’s Regional Nutrition Strategy.

Oman also unveiled the Sustainable Agriculture and Rural Development Strategy 2040, which aims to enhance the productivity and sustainability of agriculture, forestry, and fisheries. To further these goals, the sultanate also launched the Million Date Palm Plantation Project.

Salem bin Abdullah Al-Ghufaili, the agriculture ministry’s director general of food security, said that these projects include a sugar refining project — the first of its kind in the country, adding that it will be located on an area of 18,000 sq. meters at Sohar Port, with an annual production capacity of approximately 1 million tons, as reported by Oman News Agency.

Al-Ghufaili said that the plant will be equipped with state-of-the-art, European-made production lines, utilizing the latest technological advancements to produce refined sugar of the highest quality from raw sugar. 

He also said the production will be distributed locally, regionally, and globally to meet increasing demand, adding that the project’s rapid progress, with 91 percent completion, is bringing it closer to the final stages.

In a statement to ONA, the director general added that Salalah Mills Co. is currently implementing a food industries center project in the Khazaen Economic City, with an estimated cost of 18.5 million Omani rials ($48.08 million) and a production capacity of around 1.4 million units per day in its first phase.

He added that the initiative includes an industrial bakery, production lines for frozen and semi-cooked pastries, equipment and silos for storing raw materials, and refrigerated and dry storage facilities for products.

Al-Ghufaili said that the undertakings include constructing wheat silos at Sohar Port, increasing storage capacity to 160,000 tons to ensure sufficient supplies for the population.

He also highlighted a new partnership between Khazaen Economic City and Zircon Food Industries Co. to build an integrated industrial complex for filtering, sorting, and packaging rice, sugar, and spices, along with large-scale food storage units.

He stressed the ministry’s efforts to secure essential foodstuffs and storage to ensure availability during emergencies while maintaining price stability and shielding the market from fluctuations caused by global economic crises. 

The ministry also strategically stockpiles key items such as rice, wheat, and sugar, as well as lentils, powdered milk, cooking oil, and tea.