In real estate, clarity is power, especially in markets evolving as rapidly as Saudi Arabia’s. The second half of 2025 is delivering a new reality: interest rates have plateaued, government-backed megaprojects continue to shape investor sentiment, and demand patterns are shifting, not just between asset classes, but between cities.
For professionals allocating capital, developing assets, or advising clients, the critical question is no longer just what to invest in, but where and why now. That’s the core challenge this research aims to address.
We’ve developed a proprietary Gap Scorecard, a composite indicator ranking city-sector combinations across the Kingdom based on opportunity, timing, and value potential. Think of it as a real estate compass: built to help you, the professional, navigate the terrain with speed, precision, and confidence.
You’ll find the visual scorecard at the end of this article. But first, let’s break it down.
The Saudi Real Estate Outlook 2025 H2 Gap Scorecard evaluates each city-sector combination based on multiple market dimensions, including pricing versus replacement cost, yield spreads, leasing dynamics, pipeline delivery risk, and institutional buyer appetite. It doesn’t just capture what’s hot — it reveals where the gap between current market value and highest and best use is most actionable.
| Rank | City – Sector | Score |
|---|---|---|
| 1 | Riyadh — Office | 82 |
| 2 | Riyadh — Industrial & Logistics | 72 |
| 3 | Jeddah — Office | 72 |
| 4 | Riyadh — Residential | 68.6 |
| 5 | Jeddah — Industrial & Logistics | 68.4 |
The takeaway? The office sector is back, and Riyadh is at the forefront of the resurgence. However, there are nuances — including a strong showing by Jeddah and a tight race between residential and logistics sectors.
Riyadh’s office market experienced a significant inflection point.Two years ago, analysts questioned whether high-grade office developments could sustain momentum beyond Vision 2030 mandates. Demand is deepening, not just widening, building on two main drivers:a) Public sector relocations and quasi-government entities continue to anchor the market, b) Further, private sector absorption is increasing, especially among multinationals expanding their operations in legal, tech, finance, and ESG-linked services.Vacancy in prime-grade assets is tightening. Rents are rebounding. And yet, development pipelines remain constrained, with financing selectivity limiting speculative supply.All of this puts Riyadh Office in a unique position: priced at a discount to replacement cost, yet backed by increasingly institutional-grade fundamentals. That’s why it tops the scorecard with a leading Gap Score of 82 — the widest and most actionable opportunity in the market today.
Riyadh isn’t just winning in the office. Its industrial and logistics sector shares the second-highest score (72), underscoring the depth of demand for warehousing, distribution, and light manufacturing hubs — particularly those linked to e-commerce and last-mile delivery.Despite increasing interest, the scarcity of ready-to-build, infrastructure-serviced land remains a bottleneck, making existing assets more valuable and development margins more attractive.Close behind is Riyadh Residential at 68.6 — a sector with complexity. On the one hand, affordability pressures remain a genuine concern. On the other hand, the government’s long-term push for homeownership and urban densification continues to drive absorption. Developers who can navigate zoning changes and deliver mid-income housing efficiently are finding outsized returns.Then there’s Jeddah — historically a slower mover compared to Riyadh, but gaining pace.
Two of Jeddah’s sectors appear in the top five: Office (72) and Industrial & Logistics (68.4). This signals a regional rebalancing — and the market is taking note.Jeddah’s office sector is benefiting from government decentralization strategies and private relocations seeking cost-efficiency relative to Riyadh. Vacancy is falling in key nodes like Al Andalus and Al Rawdah, and investor interest is rising — particularly for mid-scale mixed-use buildings that combine office, retail, and hospitality.On the logistics side, proximity to ports (King Abdulaziz Port, Jeddah Islamic Port) and improved last-mile infrastructure are pushing up rents and compressing yields, especially in coastal industrial clusters.The implication? Jeddah is no longer just a secondary play — it’s an emerging contender
If you’re a real estate professional, investor, advisor, developer, or strategist, the Gap Scorecard isn’t just a summary. It’s a signal.
Here’s how to think about it:
In real estate, the best opportunities aren’t always the most obvious ones.
Riyadh’s office market, once dismissed as saturated, is now the top-performing segment. Logistics, while competitive, still has room to run — especially in locations with infrastructure constraints. And Jeddah? It’s becoming the quiet outperformer in both office and industrial.
As you look to position yourself — or your clients — for 2026 and beyond, don’t rely on past narratives. Use the data. See the gaps. And move with insight.
Scroll down to view the full KSA 2025H2 Gap Scorecard — your guide to the Kingdom’s highest and best use opportunities.
An institutional evidence pack for the next six months. We enforce a Two‑Source Rule on decisive metrics, show values·units·as‑of dates, label Inference vs data, and disclose upgrade paths where city microdata are gated.
Download your Data Pack: (Residential, Commercial, Retail, Offices, Hospitality, Industrial, Logistics, Education, Mix-use, Data Center) → Get here
The composite ranks city×sector on six pillars: Demand, Supply (6–18m), Pricing Power, Affordability, Liquidity, and Policy. We weight pillars into a 1–5 score; then apply sector weights to form a country ranking.
Values include unit and as‑of date; each row cites a primary authority and an independent corroboration.
| Metric | Latest | As‑of | Primary | Corroboration | Confidence |
|---|---|---|---|---|---|
| Policy rate (Repo) | 4.75% | 2025‑09‑17 | SAMA | Reuters | High |
| CPI — headline (YoY) | 2.3% | 2025‑08 | GaStat | SPA | High |
| CPI — Actual rentals for housing (YoY) | 7.6% | 2025‑08 | GaStat | Arab News | High |
| Construction Cost Index (YoY) | +0.7% | 2025‑07 | GaStat | SPA | High |
| Money supply (M3, YoY) | +8.4% | 2025‑07 | SAMA | SPA | High |
| Bank credit to private sector (YoY) | +13.7% | 2025‑07 | SAMA | GIB Capital | Medium |
| New residential mortgages to individuals (value) | SAR 6.42 bn (‑9% YoY) | 2025‑07 | SAMA | Argaam | Medium |
| REPI — Real Estate Price Index (YoY) | +3.2% | 2025‑Q2 | GaStat | Argaam | High |
| Riyad Bank / S&P Global PMI | 56.4 | 2025‑08 | S&P Global | Reuters | High |
| Ports — TEUs handled (KSA) | 750,634 (+9.5% YoY) | 2025‑08 | MAWANI/press | Argaam | High |
| Air passengers (all airports, H1) | >66 million (+7% YoY) | 2025‑H1 | GACA | Aviation Week | High |
| USD/SAR peg | 3.75 | 2025‑09 | IMF | SAMA research | High |
6‑month read‑through (Inference): modest policy easing with inflation near 2% and rent CPI elevated → landlord pricing power persists in the near term; cap‑rates biased to 10–25 bps compression; I&L demand supported by TEUs and PMI; hotel KPIs hinge on monthly Pax/STR. Sensitivities: ±25 bps policy; EJAR flows; handover cadence.
Download your Data Pack: (Residential, Commercial, Retail, Offices, Hospitality, Industrial, Logistics, Education, Mix-use, Data Center) → Get here
| Anchor | Latest | As‑of | Primary | Corroboration | Conf. |
|---|---|---|---|---|---|
| Population (Census anchor) | ~7.0m | 2022 | GaStat — Census | Knight Frank | Medium |
| RUH passengers (daily avg) | ~103k/day | 2024 | GACA | GACA OPS | High |
| Building licenses (dashboard) | 21,537 issued | 2025‑05‑22 | Riyadh Municipality | Balady | Medium |
| Anchor | Latest | As‑of | Primary | Corroboration | Conf. |
|---|---|---|---|---|---|
| Population (Census anchor) | ~3.713m | 2022 | Citypopulation (from Census) | SPA Census | Medium |
| JED passengers (daily avg) | ~134k/day | 2024 | GACA | GACA OPS | High |
| Electronic building permits (news) | 429 last month | 2024‑11‑05 | National Portal | Jeddah Agency | Medium |
Download your Data Pack: (Residential, Commercial, Retail, Offices, Hospitality, Industrial, Logistics, Education, Mix-use, Data Center) → Get here
| Sector | Now | Inference (6‑month band) | Drivers & Sensitivities | Conf. |
|---|---|---|---|---|
| Office | Occ ≥99.8%; Grade‑A rent ≈ SAR 2,700/sqm/yr | Rents +2–4%; Vac 0.3–1.0% | RHQ demand; thin 2025 supply; ±15 bps per ±25 bps policy | High |
| Industrial & Logistics | Prime rents: Central 230; East 206; South 228 SAR/sqm/yr | Rents +1–3% | TEUs +9.5% YoY; PMI 56.4; power/spec constraints | High |
| Residential | Rent CPI +7.6% YoY; mortgages softer | Apts +2.0–3.5%; Villas +2.5–4.0% | EJAR flows; handover cadence; ±25 bps rate | Medium |
| Retail | Base rent ~2,810 SAR/sqm/yr; occ ~90% | Rents 0–+1%; Occ 89–92% | POS trend; entertainment anchors | Medium |
| Hospitality | Riyadh: May Occ −8.7pp YoY; ADR +9.9% YoY | Occ 68–74%; ADR +2–5% | RUH monthly pax; event season | Medium |
Download your Data Pack: (Residential, Commercial, Retail, Offices, Hospitality, Industrial, Logistics, Education, Mix-use, Data Center) → Get here
| Sector | Now | Inference (6‑month band) | Drivers & Sensitivities | Conf. |
|---|---|---|---|---|
| Office | Grade‑A vac 3.3%; rent ≈ SAR 1,393/sqm/yr (+4.3% YoY) | Rents +1–3%; Vac 2–4% | Pipeline phasing (’25–’28); anchor demand | High |
| Industrial & Logistics | Prime: East 271; South 179 SAR/sqm/yr | Rents +1–3% | TEUs growth; JIP expansion (SAR 3bn) | High |
| Residential | Villas +4.4% YoY; Apts −3.0% YoY (prices) | Apts −1–+1%; Villas 0–+2% | Affordability; mortgages; launches | Medium |
| Retail | Lifestyle occ ~97%; operator portfolio occ 92.2% | Base 0–+1%; Lifestyle +1–2% | POS; new destinations | Medium |
| Hospitality | May: Occ −7.3pp; ADR −10.5% YoY | Occ 62–68%; ADR 0–+3% | JED throughput; Umrah seasonality | Medium |
Download your Data Pack: (Residential, Commercial, Retail, Offices, Hospitality, Industrial, Logistics, Education, Mix-use, Data Center) → Get here
Test: check occupancy, delivery cadence, RHQ licenses, PMI. Evidence: Prime & Grade‑A occupancy ≥99.8% (CBRE); limited 2025 deliveries; RHQ licenses 44 (Q1) & 34 (Q2); PMI 56.4 (source).
Finding: Myth rejected; base‑case rents +2–4%, vacancy 0.3–1.0%. Implication: pre‑lets in KAFD/ITCC; modest incentives; potential 10–20 bps cap‑rate compression if easing continues.
Test: parse TEU mix; check rent prints. Evidence: Aug‑2025 total 750,634 TEUs (+9.5% YoY) with imports +7.8%, exports +8.0%, transshipment +14.7%; prime submarkets still up YoY (CBRE).
Finding: Myth rejected; Inference: rents +1–3%, high occupancy. Implication: overweight spec mid‑box with modern specs in Riyadh South & Jeddah East; secure power early.
| Rank | City | Sector | Score | Why now | Confidence |
|---|---|---|---|---|---|
| 1 | Riyadh | Office | 82 | Near‑zero vacancy; thin ’25 supply; RHQ pulse | High |
| 2 | Riyadh | Industrial & Logistics | 72 | Prime rents up; TEUs strong; PMI in expansion | High |
| 3 | Jeddah | Office | 72 | Low Grade‑A vacancy; steady demand | High |
| 4 | Riyadh | Residential | 68.6 | Rent CPI elevated; mortgages softer | Medium |
| 5 | Jeddah | Industrial & Logistics | 68.4 | East/South submarket strength; JIP capex | High |
Full notes and scoring method in the Evidence Pack below.
Operating standard. Two‑Source Rule (primary authority + Tier‑1 corroboration), CRAAP ≥80, and Freshness Guard = 12 months. Metrics show value · unit · as‑of. Forecasts labeled Inference with explicit sensitivities.
Currency & gaps. Where city microdata are gated (MoJ/Najiz, REGA/EJAR, STR/CoStar), we use labeled proxies and publish upgrade paths (exact CSV/API requests). We avoid publishing Low‑confidence figures.
Reuse & citation. You may reuse charts/tables with attribution (Your Name, “Saudi Real Estate Outlook 2025H2”, page URL). Data files are provided as CSV; link back to this article.
Download your Data Pack: (Residential, Commercial, Retail, Offices, Hospitality, Industrial, Logistics, Education, Mix-use, Data Center) → Get here
We publish an institutional 6-month underwriting view with a Two-Source Rule, per-metric value, unit, as-of date, and downloadable CSVs. That means a developer or investor can verify every Riyadh or Jeddah datapoint (CPI rents, REPI, TEUs, PMI) and plug it straight into a model, no scraping, no guesswork.
Tie the Saudi real estate outlook 2025H2 macro pulse directly to assumptions: repo rate → cap-rate sensitivity; CPI (actual rentals for housing) → rent escalators; M3/credit → absorption; TEUs & air passengers → logistics and hospitality demand. This aligns the KSA real estate outlook with financing, lease-up, and exit timing.
The KSA real estate outlook 2025H2 shows Prime/Grade-A occupancy ≥99.8% with limited 2025 deliveries. Investors can underwrite +2–4% rent growth and stable vacancy (0.3–1.0%) with scenario tests ±25 bps on the policy rate. Developers should prioritize pre-lets and spec-fit-out in KAFD/ITCC.
The Saudi real estate market outlook indicates that prime rents are still rising (East/South submarkets), with TEUs at ports rising by 9.5% YoY. For investors, that supports rent growth bands of +1–3%; for developers, the play is mid-box spec (8–15k sqm) with modern specs and early power allocation.
Every table in the Saudi real estate outlook 2025H2 has machine-readable metric_id keys (e.g., cpi_rents_yoy, repi_yoy, teus_total_aug). You can reproduce charts, audit sources, and refresh the KSA real estate outlook quarterly. LPs get traceable evidence (primary + Tier-1 corroboration) and clear confidence badges.
To keep the Saudi real estate outlook current: (i) policy rate moves (cap-rates, mortgages), (ii) EJAR new-lease flow and Najiz transactions (city micro), (iii) TEU mix (imports/exports vs transshipment), (iv) air pax (Riyadh/Jeddah), and (v) White-Land/RETT updates. These flip sector momentum inside a 60–90-day window.
Use the composite scores from the KSA real estate outlook 2025H2 to rank city×sector opportunities: Riyadh Office (82/100), Riyadh I&L (~72), Jeddah Office (~72). Allocate equity where demand is strong, supply is thin, and pricing power is durable; run sensitivities with the same weights for apples-to-apples decisions.
The Saudi real estate outlook shows rent CPI at +7.6% YoY, with softer new mortgage activity. Developers should phase launches, price to income, and watch EJAR for formation vs handovers. Investors can assume Riyadh rents +2.0–4.0%, Jeddah apartments +0.5–2.0%, with ±100 bps sensitivity to leasing flow.
The Saudi real estate outlook 2025H2 uses a TL;DR, compact tables, and confidence chips for humans; JSON-LD (ScholarlyArticle + Dataset) for search/LLMs. Each decisive metric (CPI, REPI, PMI, TEUs) links to a live DO-follow source and a Tier-1 corroboration.
Yes, link to the article and ZIP of CSVs. The KSA real estate outlook files are standardized for Excel/Python/R /, and R, so developers and investors can integrate them into deal rooms, IC memos, and quarterly letters with full traceability to the Saudi real estate outlook 2025H2 page.
Need asset-level comps, absorption curves, or a bespoke Bahrain real estate pipeline audit? Contact us, and we’ll share the Bahrain Real Estate Outlook 2025 H2 deeper cuts and model tabs.
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