A number of office block construction projects in Riyadh have been delayed on the back of a saturated market and falling rental values according to US real estate analyst Jones Lang LaSalle.
Developers in Riyadh plan to add more than 1.3m square-metres of new office space to the capital’s commercial market by 2013, the firm says in the report released on 24 June.
Firms have now begun assessing the feasibility of transforming unfinished offices into healthcare or hospitality projects because vacancy rates are increasing and rents have dropped by up to 10 per cent in some districts in 2010.
Riyadh saw the introduction of 140,000 square metres of new office space in 2009 with another 50,000 sq m set to be added in 2010. In addition to an estimated 1 million sq m of space yet to be delivered, available commercial space in the capital city is poised to increase by 33 per cent by 2015.
Anticipated future supply in Riyadh includes the following large-scale projects:
|Project||Completion date (est.)||Size (sq m)|
|Al Bayt 52 and 19||2010||52,000|
|Al Wasseel Tower||2010||33,000|
|Riyadh Business Gate||2011||65,000|
|Granada Business Park||2012||133,600|
|King Abdullah Finacial District phase 1||2014||750.000|
|Information Technology Communications Complex||2015||160,000|
|Source: Jones Lang LaSalle|
Planned government-sponsored projects have contributed greatly to the office surplus in Riyadh.
Located on a 1.6 million square-metre site north of Riyadh, King Abdullah Financial District (KAFD) will include an estimated 40 commercial towers as well as residential districts and leisure and recreation facilities.
In addition to the new World Trade Centre and GCC Central Bank, KAFD will also be the site for the headquarters of the Capital Market Authority and the Saudi Stock Exchange (Tadawul).
The largest of the Gosi projects is the six-tower Granada Oasis mixed-use development in Riyadh.
The estimated $407m project is being built by the local al-Latifia Trading & Contracting, with the local Omrania and Associates serving as project manager. Granada Oasis is planned for completion in the last quarter of 2011.
Foundation work was completed in early April this year for the organisation’s Olaya Towers scheme, meanwhile.
The estimated $268m project is made up of four towers and is being built by the local Nesma & Partners Contracting Company. Zuhair Fayez Partnership Consultants is managing the project, which is scheduled for completion in the first quarter of 2012.