Middle East flex office market reaches tipping point as demand surges

08/10/2026 05:57 AST

The Middle East's flexible office market is entering a new phase of growth as companies seek greater agility in response to changing workplace models, artificial intelligence-driven disruption and an influx of new businesses into the region, according to a new report by JLL.

The consultancy's 2026 assessment of the Middle East and Africa flexible workspace sector suggests that flexible offices are evolving from a niche offering into a strategic component of corporate real estate portfolios. At the same time, most companies remain heavily reliant on traditional office leases, creating what JLL describes as a significant opportunity for future growth.

The report found that more than 90 per cent of corporate real estate portfolios in the region are still tied to conventional long-term leases. Globally, fewer than five per cent of corporations allocate more than 10 per cent of their portfolios to flexible workspaces, while more than 40 per cent dedicate one per cent or less.

According to JLL, evolving work patterns and the growing use of AI are making it increasingly difficult for companies to predict future staffing requirements and office needs, prompting businesses to seek more adaptable workspace solutions.

"The flex office sector is evolving, and the combination of a ready, financially stable supply and a growing demand for agility amid AI and evolving business requirements has created a defining moment for the industry," said Dana Williamson, Head of Offices, Business Space & Retail - MEA at JLL.

"This shift creates opportunities for investors to participate in high-growth segments and for operators to build on compelling returns," Williamson said. "As it becomes increasingly difficult for CEOs to predict what effective working habits will look like in three to five years, for corporate occupiers, flexibility becomes a core strategic tool for mitigating risk."

The report identifies Riyadh as one of the region's standout flex-office markets, driven by Saudi Arabia's Vision 2030 programme and a wave of multinational companies establishing operations in the kingdom. Most of the city's current flexible office stock has been delivered since 2022 and has recorded strong occupancy levels, approaching 90 per cent in the Olaya district and remaining in the mid-80 per cent range in King Abdullah Financial District.

Demand is being led by international companies and new market entrants. JLL estimates that 50 to 60 per cent of occupiers in Riyadh's flexible office market are international firms, while 55 to 60 per cent of enquiries come from newly established businesses.

Across the region, operators are increasingly investing in technology, meeting facilities and hospitality-led services to support hybrid work arrangements. JLL said the sector is now financially stable and operationally mature, positioning flexible workspaces as an increasingly important part of the Middle East's commercial real estate landscape.

Khaleej Times