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Occupancy rate = (number of leased units ÷ total units) × 100. It matters more than the rent level because a vacant unit produces nothing while its costs carry on. Raising the rent by 10% with 20% vacancy brings in less than steady rent with 98% occupancy. Nazeel's buildings average between 95% and 100%.
How is occupancy calculated?
The simple formula: divide the number of leased units by the total number of units and multiply by 100. A building with 33 apartments, 32 of them leased → occupancy of 97%.
But this method ignores time. It is more accurate to measure occupancy over the year: if a unit sits empty for two months out of twelve, it contributed only 83% of its annual income. That is why it is better to measure unit-month occupancy: (units × 12 − total vacant months) ÷ (units × 12).
Vacancy: the hidden cost owners don't count
Many owners count revenue but not lost opportunity. A vacant unit doesn't just mean "zero income" — it also means:
- Electricity and water for common areas still have to be paid.
- Cleaning, security and routine maintenance still cost money.
- A closed unit deteriorates faster (odours, idle air conditioners, undetected leaks).
- Re-marketing and preparation costs every cycle.
A worked example: 10% rent vs. 10% occupancy
Take a building with 20 units and a rent of SAR 2,500 per unit per month:
| Scenario | Monthly rent | Occupancy | Annual income |
|---|---|---|---|
| A — higher rent, weak occupancy | SAR 2,750 (+10%) | 80% | SAR 528,000 |
| B — normal rent, excellent occupancy | SAR 2,500 | 98% | SAR 588,000 |
A difference of SAR 60,000 a year in favour of the second scenario — even though its rent is lower. And that is before the repeated re-marketing and preparation costs of the first scenario.
The rule of thumb: stable occupancy beats a higher price in most cases — especially for mid-priced residential units.
The most common causes of vacancy in Riyadh
- Pricing above the market — the unit is excellent, but priced higher than similar units in the same district.
- Unit condition — old paint, a weak air conditioner, a worn-out bathroom. Tenants compare in two minutes.
- Slow replies — the tenant sends a message, gets no reply for hours and goes elsewhere.
- Weak listings — poor, outdated photos or not enough information.
- Common-area problems — a dirty entrance, dark corridors, a broken lift.
- Slow preparation after move-out — the unit sits for a month before it is ready to show.
How does Nazeel keep occupancy at 95–100%?
- Prepare before listing, not after — the unit is photographed when it is ready to move into.
- District-based pricing — regular reviews of competing units' prices in the same area.
- Fast replies — WhatsApp enquiries answered within a set time, with same-day viewings where possible.
- Daily on-site follow-up — cleaning, lighting, lifts and corridors, because the first impression starts at the entrance.
- Immediate preparation after move-out — the unit is back on the market within days, not weeks.
- Tenant screening — the right tenant stays longer, which reduces vacancy cycles in the first place.
The result: many Nazeel buildings run at 100% occupancy and the rest between 95% and 98% — such as the Jarir project (32 of 33 units leased) and the Al-Munsiyah project (45 units, fully occupied).
Own a property and want an honest opinion?
The Nazeel team will inspect your property and give you a realistic view of how it can be operated and the income to expect — with no obligation.
