Saudi Arabia’s real estate sector to see major growth in 2025, says JLL

Saudi Arabia’s real estate market is set for significant expansion in 2025, fueled by Vision 2030 and the Kingdom’s continued push for economic diversification, according to a new report by global real estate consultancy JLL.

The non-oil sector is projected to grow by 5.8% in 2025, up from 4.5% in 2024, supported by large-scale infrastructure investments and stronger private sector participation. “Despite global economic headwinds, Saudi Arabia’s resilience and strategic diversification, underpinned by Vision 2030, are accelerating real estate development,” said Saud Alsulaimani, Country Head of JLL in Saudi Arabia.

The limited vacancy in prime assets, flight to quality, and ambitious tourism strategies are attracting both domestic and international capital—especially in Riyadh and Jeddah.

Construction and diversification driving momentum

Saudi Arabia continues to lead the regional construction sector, with $29.5 billion in project awards in 2024 alone. The residential sector was particularly active, securing $7.9 billion in awards, while the hospitality, mixed-use, and leisure segments also saw significant momentum.

Riyadh’s Grade A office market posted a vacancy rate of just 0.2% in Q4 2024, with average rents hitting $609 per sq m. The capital has 888,600 sq m of office space currently in development, reflecting sustained demand.

In the residential market, villas made up 53.3% of all transactions in Riyadh, while apartments dominated in Jeddah, accounting for 82.8% of projected units in 2025.

Hospitality in both Riyadh and Jeddah continues to expand, supported by corporate tourism, major global events, and religious travel. Riyadh’s average daily hotel rates surged 13.3% to $239 in 2024, with 2,312 new hotel keys expected in 2025.

Retail and logistics sectors evolve

The Kingdom’s retail landscape is shifting toward experiential, open-air formats, as traditional mall concepts face growing challenges. Community malls grew by 5.5%, while regional malls saw a 9.3% year-on-year decline.

In the industrial and logistics segments, rents continued to rise in both Riyadh and Jeddah, fueled by e-commerce growth and diversified economic activity. Maroun Deeb, Head of Projects and Development Services at JLL in KSA, said:

Strategic projects aligned with Vision 2030—along with major events like EXPO 2030 and the FIFA World Cup 2030—will drive significant investment flows, boost infrastructure, and position real estate for long-term growth,

Data centres and digital transformation

Saudi Arabia is also emerging as a digital infrastructure leader, ranking third in the region for live colocation facilities and accounting for 12.6% of the region’s IT load capacity by the end of 2024.

With major international events on the horizon, Saudi Arabia is reinforcing its efforts across localisation, digital transformation, infrastructure development, and sustainability—creating a dynamic and attractive landscape for real estate investment heading into 2025 and beyond.