Saudi Real Estate, Tourism & Tech Hit Record Highs in 2025

Saudi Arabia is witnessing an economic transformation in 2025 as its commercial real estate, tourism, and digital technology sectors achieve historic highs. With the government’s Vision 2030 initiative in full swing, the Kingdom is becoming one of the Middle East’s most dynamic destinations for investment, tourism, and innovation. According to global consultancy Knight Frank, the growth in cities like Riyadh, Jeddah, Makkah, and Madinah reflects strategic planning, global investor confidence, and rapid infrastructure development. Saudi Arabia is redefining its global economic position by leveraging strong policy frameworks, large-scale urban projects, and private sector partnerships.

Office Rents in Riyadh Reach Record Highs

In early 2025, Riyadh’s commercial real estate market broke records as office rents rose by 23% year-on-year, reaching SAR 2,700 per square metre. This marks the highest office rent ever recorded in the Saudi capital. The dramatic increase is linked to a surge in demand from foreign companies and the Kingdom’s business-friendly policies.

Occupancy levels for Grade A office spaces in Riyadh reached 98%, indicating limited availability and consistent demand. The momentum has been significantly supported by the Regional Headquarters Programme, a national initiative that offers compelling benefits for global businesses.

Regional Headquarters Programme Fuels Foreign Expansion

The Regional Headquarters Programme is a cornerstone of Saudi Arabia’s plan to become a regional business hub. The program offers zero percent corporate income tax and no withholding taxes for 30 years to qualifying foreign companies. These incentives have already attracted over 600 multinational companies, each announcing plans to set up regional headquarters in Riyadh.

Knight Frank’s research shows that 14,303 foreign business licenses were issued in 2024—a 67% increase year-on-year. This surge is evidence of the global business community’s growing interest in Saudi Arabia’s liberalized and restructured investment landscape.

Jeddah Rises as an Economic Powerhouse

Jeddah is quickly gaining prominence as Saudi Arabia’s next commercial hub. With office occupancy at 95%, the city is attracting attention from both domestic and international investors. Major developments like Jeddah Gate and Jeddah Rose are in progress, expected to expand the city’s office and retail space substantially over the next few years.

Jeddah’s location on the Red Sea, close to major ports and trade routes, makes it ideal for companies looking to tap into logistics, shipping, and tourism sectors. The growing interest in Jeddah underlines the government’s plan to diversify urban centers and avoid economic overconcentration in the capital.

Tourism Sector Hits New Milestones

Saudi Arabia tourism industry reached new heights in 2024, welcoming 30 million international visitors, a historic record. This upward trend aligns with the Kingdom’s Vision 2030 goal to attract 70 million international visitors by 2030.

The increase in religious tourism, cultural events, and infrastructure projects has led to strong performance across the hospitality sector. In Makkah, the Revenue Per Available Room (RevPAR) jumped 35.7%, while the Average Daily Rate (ADR) increased nearly 29%, reaching SAR 859.

The growth is linked to an 8.3% rise in Umrah visas as more pilgrims return to the holy cities post-pandemic. Saudi Arabia’s robust visa policies and improved travel experience are making the country an increasingly popular religious tourism destination.

Madinah Posts Highest Hotel Rates in the Kingdom

Madinah has seen the most impressive hotel performance metrics in the country. The city’s ADR rose by 11.8% to SAR 891, while RevPAR climbed by 15.1%. These metrics point to strong demand ahead of the Kingdom’s plan to host 30 million pilgrims annually by 2030.

To meet rising demand, more than 6,000 new hotel rooms are in the pipeline, with global hospitality giants like Hilton and Marriott committing to new developments. This surge in hospitality infrastructure is crucial for supporting long-term religious tourism growth and enhancing the pilgrim experience.

Infrastructure Projects Expand Capacity in Holy Cities

The Kingdom is investing heavily in upgrading infrastructure around key religious destinations. In Makkah, the Rua Al Haram project is expanding hotel capacity and improving access routes near the Grand Mosque. Similarly, Rua Al Madinah is transforming Madinah’s urban landscape, enhancing connectivity and visitor services.

These projects include new roads, public transit systems, and mixed-use developments designed to improve crowd management and elevate guest experience. They are central to Vision 2030’s tourism agenda and are expected to drive both economic and social returns over the coming decade.

Data Center Market on Track for Explosive Growth

Saudi Arabia is not only investing in physical infrastructure but also in digital transformation. The country’s data center market, valued at US$ 1.78 billion in 2023, is forecasted to grow to US$ 3.2 billion by 2029. This expansion aligns with the Kingdom’s ambition to become the region’s premier digital hub.

Major cloud providers—including AWS, Microsoft, Google Cloud, and Oracle—are increasing their investments in the Kingdom. Amazon Web Services (AWS) has committed US$ 5.3 billion to Saudi operations, while Chinese players like Alibaba Cloud and Huawei Cloud have also scaled up their infrastructure.

IT Capacity to Quadruple by 2030

Saudi Arabia’s IT infrastructure is expected to quadruple to over 1,000 megawatts by 2030, making it one of the fastest-growing digital economies worldwide. This capacity expansion will support advanced technologies including artificial intelligence (AI), blockchain, IoT, and 5G infrastructure.

Data centers are critical for supporting government digital services, cloud migration, smart city development, and enterprise-scale analytics. The Kingdom’s emphasis on tech infrastructure is paving the way for private-public partnerships in education, health, logistics, and e-governance.

Saudi Arabia’s AI Ambitions Gain Global Recognition

The Kingdom’s commitment to AI is evident in the Transcendence AI initiative, a US$ 100 billion national investment program aimed at making Saudi Arabia a global leader in artificial intelligence. The initiative focuses on developing national data capabilities, ethical AI regulations, and high-impact AI applications across industries.

According to Stephen Beard, Global Head of Data Centres at Knight Frank, “Saudi is now among the top five global AI superpowers.” This recognition underscores the country’s transformation into a future-ready economy, powered by innovation and strategic investments.

Vision 2030 Powers Sustainable, Diversified Growth

All these developments are rooted in Vision 2030, Saudi Arabia’s long-term national transformation blueprint led by Crown Prince Mohammed bin Salman. From economic diversification to social empowerment, the initiative is redefining the Kingdom’s role on the global stage.

With measurable progress in real estate, tourism, and technology, Vision 2030 is positioning Saudi Arabia as a regional and international leader in business, innovation, and sustainability.