RIYADH: Saudi Arabia’s thriving economy has resulted in rising occupancy levels and an increase in the average rentals of commercial spaces in the Kingdom’s major cities in the second quarter, according to a global real estate consultancy firm. According to CBRE’s latest report, offices in the capital city of Riyadh had nearly 100 percent occupancy in the second quarter of this year, with Grade A and Grade B properties witnessing a year-on-year rise in average rental rates by 12.2 percent and 14.4 percent, respectively. Grade A office properties have high-end amenities and good connectivity, while Grade B spaces are less advanced than the former. The report noted that Grade A office rents in Jeddah increased by 20.7 percent in the second quarter of 2023, compared to the same period a year earlier, while Grade B rents rose by 1 percent during the same time frame. “In the second quarter of 2023, Saudi Arabia’s real estate market continued to see its positive momentum continue,” said Taimur Khan, CBRE’s head of research for the Middle East and North Africa. He added: “Market segments such as the Kingdom’s hospitality, industrial and office sectors have recorded strong rates of growth on the back of an influx of demand or a lack of suitable supply or in some cases both.” Residential sector overview in Q2 According to the report, the average apartment price in Riyadh surged by 22.9 percent in the second quarter of this year compared to the same period in 2022. The report added that apartment prices in Dammam rose by 2.4 percent annually in the second quarter. However, apartment prices in Khobar and Jeddah declined by 4.3 percent and 3.5 percent, respectively. The report further noted that the total number of residential transactions in Saudi Arabia declined 38.1 percent in the second quarter to SR26.8 billion ($7.14 billion) compared to the year-ago period. “One sector which has bucked the wider trend has been Saudi Arabia’s residential sector. Heightened affordability challenges, combined with a lack of suitable stock, has meant that the number of residential transactions volumes fell sharply in the first half of 2023, compared to a year earlier, albeit with prices increasing in most parts,” added Khan. Tourism sector grew in Q2 The report noted that Saudi Arabia’s hospitality sector witnessed robust expansion in the second quarter of 2023. All key performance indicators of hotels improved in the second quarter of 2023, with the average occupancy rate in the first six months of the year increasing by 8.4 percentage points. This trend helped hotels improve their average daily rates, which increased by 25.2 percent. In comparison, revenue per available room also grew by 44.4 percent in the second quarter compared to the same period of the previous year.