Market Trends of Dammam Commercial Construction Industry
The Demand for Office and Retail Space is Increasing
The Dammam metropolitan area witnessed positive office performance. In the last 12 months, a healthy demand and positive economic sentiment in the Eastern Region led to an 8% increase in Grade A office space rents. The rent went up from SAR 930 psm (USD 247.755 psm) to SAR 1,000 psm (USD 266.403 psm). At the same time, the occupancy rate increased to 81%, up from 75% last year.
In 2023, the average occupancy of Grade B space increased by 2.2% to 68.6%. Average rents for Grade A space increased by 7.5% to USD 253 per square foot in Dammam. On the other hand, the rent for Grade B increased by 4.8% to USD 147 per square foot.
The office stock amounted to around 1.3 million square meters, with over 46,000 square meters built in the first six months of 2023. By 2025, an additional 262,000 square meters are expected to be installed, representing a 25% increase.
The retail market in Dammam is somewhat subdued. The rental rate increased marginally by 0.5% to approximately SAR 2,300 per square foot (USD 612.727 psf) in the second quarter of 2023, while the demand for regional and super-regional malls continued to be maintained. The occupancy rate increased slightly by 1% during the same period, rising from 89% to 90%.
More Logistics Hubs are Being Constructed
Saudi Arabia announced an ambitious master plan to build 59 advanced logistics centers nationwide. As Saudi Arabia sets its sights on becoming a central global logistics hub, this strategic initiative is critical to the broader national transport and logistics strategy.
In H1, the indicators of hospitality market performance in Dammam were mixed. Occupancy increased to around 60%, up 10% from the previous year. The RevPAR increased by 8% and reached an average of SAR 242 (USD 64.46) during the same period of the previous year.
Saudi Arabia's Vision 2030 is built on infrastructure development, with exciting plans and substantial investment. The Kingdom’s strategic geographical location, situated at the crossroads of Asia, Europe, and Africa, positions it as a vital hub for international trade.
The new partnership agreement with Dammam Airport Company, providing logistics services from King Fahd International Airport in Saudi Arabia's Eastern Province, was concluded by AJEX Logistic Services, which is considered to be one of the most experienced express distribution and shipping solutions specialists in the Middle East.
