Saudi Arabia: Foreign Companies Influx Raises Office Rental Prices

Saudi Arabia issued more than 1,600 foreign investment licenses in the first quarter of 2023. (Asharq Al-Awsat)
Saudi Arabia issued more than 1,600 foreign investment licenses in the first quarter of 2023. (Asharq Al-Awsat)
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Saudi Arabia: Foreign Companies Influx Raises Office Rental Prices

Saudi Arabia issued more than 1,600 foreign investment licenses in the first quarter of 2023. (Asharq Al-Awsat)
Saudi Arabia issued more than 1,600 foreign investment licenses in the first quarter of 2023. (Asharq Al-Awsat)

The influx of foreign companies to the Saudi local market, along with several other factors, has led to an increase in office space rental prices by 20 percent.

Saudi Arabia issued more than 1,600 foreign investment licenses in the first quarter of 2023, with an average of 25 per day, according to the latest official report by the Ministry of Investment.

Experts told Asharq Al-Awsat that the high demand was due to the establishment of new government and private bodies and entities, and the increased entry of foreign companies into the local market.

The specialists revealed that the occupancy rate in category A office space has increased to 97 percent.

The director of real estate and property at Olaya Company, Mohammad Al-Omari, told Asharq Al-Awsat that office rental prices increased by 15 percent during the last 12 months.

CEO of Menassat Khaled Al-Mobid told Asharq Al-Awsat that demand for offices would increase in the coming period, due to the entry of foreign companies and the growth of commercial sectors, given the scarcity of supply that led to a 20 percent rise in the rental value.

A recent report issued by Invest in Saudi Arabia, one of the initiatives of Vision 2030, showed that more than 1,600 foreign investment licenses were granted in the first quarter of this year, compared to 1,300 in the last period of 2022, marking an increase of 2.3 percent.

The report expected the building and construction sector to continue to provide great opportunities for investors with the launch of mega and huge projects within the Kingdom’s development plans in the tourism and housing sectors.

The Saudi government completed 104 investment deals during the first quarter of 2023, compared to around 101 during the same period last year, recording an increase of about 3 percent.



Abdulaziz bin Salman: Saudi Arabia Plans to Enrich, Sell Uranium

Prince Abdulaziz bin Salman speaking at the forum (X)
Prince Abdulaziz bin Salman speaking at the forum (X)
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Abdulaziz bin Salman: Saudi Arabia Plans to Enrich, Sell Uranium

Prince Abdulaziz bin Salman speaking at the forum (X)
Prince Abdulaziz bin Salman speaking at the forum (X)

Saudi Arabia is actively pursuing investments in mineral resources, including uranium enrichment and sales, as part of its broader strategy to achieve 130 gigawatts of renewable energy capacity, ensuring a 20% energy reserve.

Saudi Energy Minister Prince Abdulaziz bin Salman announced these plans during the eighth edition of the In-Kingdom Total Value Add (IKTVA) Forum and Exhibition, organized by Aramco. The event witnessed the signing of 145 agreements and memorandums of understanding worth approximately SAR 33.75 billion ($9 billion), with the aim to promote localization of goods and services, foster collaboration, and strengthen local content in supply chains.

The IKTVA 2025 forum, held under the theme “Ecosystem of Opportunities,” showcased the growth of local supply chains, the progress of key enabler projects, and cooperation to further develop the local supply ecosystem.

During his address, the Energy Minister stated: “Saudi Arabia will enrich, sell, and produce uranium yellowcake,” a refined uranium concentrate used as fuel for nuclear reactors.

He emphasized the nation’s wealth of rare minerals, including uranium, saying: “For anyone doubting our mining capabilities, we will mine, process, and enrich uranium—and achieve even more.”

He highlighted that ensuring the availability of critical materials is essential for energy security, as Saudi Arabia continues to prioritize the stability of oil supply.

The minister also stressed the Kingdom’s goal of reaching 130 gigawatts of renewable energy capacity to meet its anticipated economic growth, which he said is expected to exceed current projections. “Without energy, there can be no prosperous or productive future,” he said.

Prince Abdulaziz emphasized the importance of expanding oil and gas operations, stating that Saudi Arabia is entering a fourth phase of gas system development in collaboration with Aramco. He highlighted efforts to localize advanced technologies developed over the past few years.

The petrochemical industry, he noted, will play a pivotal role in the future, stating: “Its significance extends beyond plastics to include a wide range of materials and polymers that will be produced.”

He also underscored the importance of localizing energy supply chains to boost the national economy through collaboration and innovation, creating new opportunities that align with national goals.

Regarding the IKTVA program, the minister described it as a model initiative that has transitioned from local content development to full-fledged localization. He also touched on Saudi Arabia’s Sustainability Program for Petroleum, launched in 2020, which aims to sustain and grow demand for hydrocarbons as a competitive energy source while ensuring an efficient and sustainable energy transition.

Saudi-Egyptian Cooperation

Prince Abdulaziz also highlighted ongoing efforts to establish a roadmap for cooperation with Egypt in electricity. Egyptian Minister of Electricity and Renewable Energy Mahmoud Esmat previously announced that the Saudi-Egyptian electricity interconnection project would begin operations before the summer of 2024.

Esmat noted that efforts are underway to complete the project, with a task force formed to resolve any obstacles. The two nations are working together to expand investments in renewable energy, particularly solar and wind, and to exchange technical expertise in electricity generation, transmission, and distribution.

Strengthening Local Industries

Aramco President and CEO Amin Nasser revealed plans to increase energy production by 70%, which will contribute to job creation in Saudi Arabia. He highlighted the establishment of over 500 factories since 2015, which have collectively generated $250 million in revenue.

Nasser emphasized Aramco’s extensive industrial projects in Ras Al-Khair and its plans to launch new facilities specializing in mining and manufacturing. He noted that these initiatives will significantly enhance local industries.

He also mentioned that IKTVA operates 16 training centers, having trained over 2,500 individuals in specialized programs and equipped 7,000 citizens with the skills required for the labor market.

Aramco signed 145 agreements and memorandums of understanding valued at SAR 33.75 billion ($9 billion) during the forum. These agreements aim to localize goods and services and strengthen local content in the supply chain.

Since the launch of IKTVA in 2015, localization rates have risen from 35% to 67% by 2024. Wael Al-Jaafari, Aramco’s Executive Vice President for Technical Services, emphasized that IKTVA has created cutting-edge business systems, unlocked new opportunities, and generated jobs for Saudi citizens while building a world-class supply chain.

He added that the program aims to achieve a localization rate of 70%, increase exports of locally manufactured goods and services, and create direct and indirect jobs for Saudi youth. As part of this initiative, 210 localization opportunities across 12 sectors—valued at SAR 105 billion ($28 billion) annually—have been identified.

Since its inception, IKTVA has facilitated the establishment of 350 manufacturing facilities with capital expenditures exceeding SAR 33.75 billion ($9 billion), Al-Jaafari remarked. These facilities cover various sectors, including chemicals, non-metallic materials, IT, electrical equipment, drilling systems, and more. The program has enabled the production of 47 products for the first time in Saudi Arabia.

On the opening day of IKTVA 2025, several key projects were announced, including the launch of Asmo—a joint venture between Aramco Development and DHL in Riyadh aimed at revolutionizing procurement and supply chains in the Middle East and North Africa.

Additionally, Navel Non-Metallic Solutions inaugurated its facility in King Salman Energy City, while the marine manufacturing facility by NMDC began operations in Ras Al-Khair.