What Grade A office means in the Gulf
Grade A, Grade B and prime are different tiers, and each research house draws the lines its own way. How to tell them apart in Riyadh, and what the public record shows.
Grade A is the newest, best-located and best-specified office stock in a market. It is a relative label with no common standard, and in the Gulf it sits below a separate "prime" tier. A rent or vacancy figure means little until you know which tier it describes, because the tiers can differ by a third or more.
The tiers
There is no ISO standard for office grades. Each research house draws its own lines, judged against the best stock in that market.
- Prime: the landmark towers in the strongest location, newest and best managed. In Riyadh, that means KAFD. Prime rents sit above Grade A.
- Grade A: modern institutional buildings in good locations, with efficient floor plates and professional management. What a multinational expects.
- Grade B: older or secondary buildings. Weaker location, smaller floor plates, dated services.
- Grade C: the oldest stock, often waiting for redevelopment.
The same building can be "Grade A" in one report and "prime" in the next. That explains most of the apparent contradictions between office reports: they grade the stock differently. Fix the tier before you compare the number.
Spotting Grade A when nobody publishes the grade
The figures people want (how many square metres are Grade A, Grade A vacancy, Grade A rent) come only from private brokerage surveys. No Saudi government body, exchange filing or developer publishes them for Riyadh. So we read the grade from things that do appear in public filings.
- Location in the business district. This is the clearest marker in the Gulf. The KAFD towers in north Riyadh, or the Hittin office complexes held by listed funds, are prime on location alone.
- Institutional tenants on long leases. Riyad REIT reports a weighted lease term of 8.98 years across its portfolio. Bonyan REIT's two Riyadh towers are let to a government entity on triple-net leases (Riyad REIT, Bonyan REIT).
- International occupiers. KAFD hosts 19 regional offices, including Goldman Sachs, PepsiCo and Bain. The Kingdom now counts 700+ regional headquarters (KAFD, RCRC).
- New, high-spec buildings. New Murabba plans 1.4 million sqm of offices. Along with the purpose-built KAFD towers, that is Grade A or prime by age and specification (PIF).
The tier changes the number
Listed landlords show the gap clearly. Prime offices with institutional tenants are effectively full. Older multi-tenant buildings carry real vacancy.
| Office type (observable) | Occupancy | Example (primary source) |
|---|---|---|
| Prime / government-anchored, long lease | 100% | Olaya Tower, Al-Raed Building, Bonyan's two Riyadh towers |
| Institutional multi-asset portfolio | ~96-99% | Riyad REIT 98%, Al Maather 99.2%, Derayah 96% |
| Secondary multi-tenant office | 74% | SEDCO's Al Khalidiya Business Center |
Occupancy figures from each fund's own disclosures (Dec 2025 / Dec 2024 / Dec 2023). See the Riyadh office market analysis for the full source list.
A full prime tower and a 74%-let secondary office are 26 percentage points apart (SEDCO, Dec 2024). That is why a "Riyadh office vacancy" figure without a tier tells you very little. When space is tight, occupiers move into the best buildings and leave the weakest ones empty, so the spread between grades says something about the market in its own right.
What the public record will not give you is the Grade A and Grade B split in square metres, or a surveyed Grade A rent. Those stay with the brokers, and we do not borrow them here.
Flight to quality inside one portfolio
SEDCO Capital REIT shows the same pattern within its own book. Its single-tenant Al Rawdah office was 100% let. Its multi-tenant Al Khalidiya office was at 74%, with less than a year of lease term left. Same fund, same reporting period (SEDCO, Dec 2024).
Prime fills first and empties last, and here it shows up in an audited report rather than a survey. For the wider Riyadh picture, see Riyadh Office Market: What the Public Data Shows.
FAQ
What is the difference between Grade A and Grade B office space? Grade A is newer, better located and better specified. Grade B is older or secondary. In public filings the gap shows up as occupancy: prime and institutionally let Riyadh offices report at or near 100%, while a secondary multi-tenant office can sit in the mid-70s.
Is "prime" the same as "Grade A"? No. Prime is a tier above Grade A, the landmark towers in the best locations (KAFD in Riyadh). It usually has higher rents and fuller buildings.
Is office grading standardised? No. Each research house sets its own criteria, so one building can be graded differently across reports. Fix the tier before comparing sources. Only private brokerages publish a market's grade split.
What makes an office building Grade A in the Gulf? Age, location, specification, floor-plate efficiency, building services, tenant quality and lease length, judged against the best stock in that market. Long institutional leases and international occupiers are the easiest markers to check.
Related
- Riyadh Office Market: What the Public Data Shows
- Absorption rate in real estate, explained
- Pipeline vs net supply: how to read a development tracker
Sources
- Riyad REIT Fund, Annual Report 2025 (WAULT 8.98y; Riyadh assets 100%): link
- Bonyan REIT, Annual Report 2023 (Riyadh office towers, triple-net): link
- SEDCO Capital REIT, Annual Report 2024 (Al Rawdah 100% vs Al Khalidiya 74%): link
- KAFD (19 regional offices, prime cluster), via Argaam: link
- Royal Commission for Riyadh City (RHQ 700+): link
- Public Investment Fund, New Murabba (1.4M sqm office): link