What 'Grade A Office' Actually Means in the Gulf
Grade A, Grade B and prime are not interchangeable. What each tier means in the Gulf, why no house defines it identically, and what the public record does and doesn't show.
"Grade A office" means the newest, best-located and best-specified stock in a market, but it is a relative, unstandardised label, and in the Gulf it sits below a separate "prime" super-tier. Quote a rent or a vacancy rate without naming the tier and the number is close to meaningless, because the tiers can differ by a third or more.
The tiers, defined
Office grading is qualitative and market-relative. There is no ISO standard; each research house draws the lines itself.
- Prime: the top of the market, landmark towers in the strongest location, newest, highest specification, best-managed. In Riyadh this is KAFD. Prime carries its own rent, above Grade A.
- Grade A: institutional-quality stock, modern buildings, strong locations, good floor plates, efficient services, professional management. What a multinational expects.
- Grade B: older or secondary, with earlier specification, weaker location, smaller or less efficient floor plates, dated services.
- Grade C: the oldest, least efficient stock, often awaiting redevelopment.
Because the lines are drawn locally, the same building can be "Grade A" in one report and "prime" in another. That is the single reason cross-source office figures so often appear to contradict each other when they do not: they are grading the stock differently. Reading them well means holding the tier fixed before comparing the number.
How to spot Grade A when nobody publishes the grade
Here is the practical problem. The quantified grade split for a Gulf market (how many square metres are Grade A, what Grade A vacancy is, what the Grade A rent is) is compiled only by private brokerage surveys. No Saudi government body, exchange filing or developer publishes a Riyadh "Grade A stock" or "Grade A vacancy" number. So rather than borrow a survey figure, read the grade off attributes that are visible in the primary record:
- Prime location in the central business district. The clearest Gulf marker. KAFD's towers in northern Riyadh, or the Hittin-district office complexes held by listed funds, are prime by location alone.
- Institutional tenants on long leases. Grade A is what multinationals and government entities take, on long terms. Riyad REIT reports a portfolio weighted lease term of 8.98 years; Bonyan REIT's two Riyadh towers are let to a government entity on triple-net leases (Riyad REIT; Bonyan REIT).
- International / regional-HQ occupiers. KAFD hosts 19 regional offices of firms like Goldman Sachs, PepsiCo and Bain, part of the 700+ regional headquarters now in the Kingdom (KAFD; RCRC).
- New, high-specification build. New Murabba's 1.4 million sqm of planned office space and KAFD's purpose-built towers are Grade A / prime by specification and age (PIF).
Grade, in other words, is an attribute bundle you can evidence from primary disclosures, even when the tidy percentage split is not public.
Why the tier decides the number
The tier gap is not academic; it shows up directly in what listed landlords report. Prime, well-located, institutionally-let offices sit effectively full, while older multi-tenant stock carries 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.
Read that table and the point of grading becomes concrete. The 26-percentage-point gap between a full prime tower and a 74%-let secondary office (SEDCO, Dec 2024) is the whole reason a "Riyadh office vacancy" quoted without a tier is close to meaningless. When space is short, occupiers consolidate into the best stock and let the weakest empty, so the spread between grades is itself a reading of how the market is behaving, not a passive label. What the public record will not give you is the exact Grade A / Grade B square-metre split or a surveyed Grade A rent; those remain brokerage-only, and this analysis flags them as such rather than importing them.
Flight to quality, in the disclosures
The same dynamic separates prime from secondary within a single landlord's book. SEDCO Capital REIT ran its prime, single-tenant Al Rawdah office at 100% while its multi-tenant Al Khalidiya office sat at 74% with a lease term under a year, in the same portfolio, in the same reporting period (SEDCO, Dec 2024). Prime fills first and empties last. That is flight to quality visible in an audited report, without a market survey.
For the full Riyadh picture across the primary record, 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, better-specified institutional stock; Grade B is older or secondary. In the primary record the difference 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 super-tier above Grade A, the landmark, top-location towers (KAFD in Riyadh). It carries a higher rent and, typically, fuller occupancy.
Is office grading standardised? No. It is qualitative and set by each research house, so the same building may be graded differently across reports. Always fix the tier before comparing figures between sources. The quantified grade split for a market is published only by private brokerages, not by any public source.
What makes an office building Grade A in the Gulf? A combination of age, location, specification, floor-plate efficiency, building services, tenant quality and lease length, judged relative to the best stock available in that specific market. Long institutional leases and international occupiers are strong observable markers.
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