Will Saudi Arabia’s ‘bold move’ prompt global businesses to relocate their regional Program HQs?
Demand for Grade A office spaces in Riyadh has surged as momentum builds around the Saudi government’s ‘Program HQ’ initiative. The initiative has already shown 44 multinational companies signal intent to shift their regional headquarters to the kingdom’s capital.
The directive was announced earlier this year by Saudi authorities, which stipulated that; from 2024, companies who fail to have their regional HQ in Riyadh; would not be considered for government contracts.
The move aimed at attracting investment and generating; jobs for Saudis which creates 2.5 jobs indirectly; in the base economy for every job attracted through the program.
The international real estate consultant Knight Frank reported that the growing demand for Grade A office; space had placed upward pressure on lease rates, which have risen 2.9 percent in 12 months.
Knight Frank predicts that demand for high-quality office spaces will intensify as blue-chip multinationals will not settle for anything less; further driving the growing difference between Grade A and Grade B rents.
The Saudi headquarters ultimatum has placed the kingdom in competition with the regional business hub, the UAE. As a result, it will redefine the future economic landscape across the Middle East for the better.
Saudi Crown Prince Mohammed bin Salman’s strategy to double the size of the city and turn it into a global hub has an $800 billion backing.