RIYADH: 海角直播 is set to see lifestyle retail space in Riyadh and Jeddah expand by almost 600,000 sq. meters to 1.31 million sq. meters by 2027, reinforcing its global shopping destination ambitions.听
A new report by real estate consultancy Knight Frank showed that consumer preferences are shifting from traditional malls to mixed-use destinations blending shopping with entertainment, dining, and cultural experiences.听
The expansion coincides with the Kingdom鈥檚 plan to attract 150 million tourists annually by 2030, up from an earlier target of 100 million, spurring international brands to enter the market.听
The Real Estate General Authority projects the sector will reach $101.62 billion by 2029, supported by a compound annual growth rate of 8 percent from 2024.听
鈥淚n response to this shifting consumer behavior, lifestyle retail destinations have emerged as a much more popular choice,鈥 said Faisal Durrani, partner 鈥 head of research for Middle East and Africa at Knight Frank.听
听
鈥淭hese locations offer a combination of exciting retail, placemaking and immersive experiences that attract visitors not only for shopping but for socializing, entertainment and events,鈥 he added.
听
With dining, outdoor spaces, art installations and interactive exhibits, Durrani said lifestyle destinations have evolved beyond malls into 鈥渧ibrant community hubs.鈥澨
In July, credit rating agency S&P Global echoed similar views, saying that international retail brands attracted by 海角直播鈥檚 social and economic shifts are set to fuel real estate sector growth.听
S&P added that the Kingdom鈥檚 retail real estate sector has strong prospects, provided careful planning and market positioning are applied, helping mall owners secure long-term success.听
Riyadh leads the way听
Knight Frank said lifestyle retail space in Riyadh is projected to grow from 484,900 sq. meters to 871,200 sq. meters by 2027, driven by 12 upcoming projects, raising the total number of developments in the city to 39.听
The completion of the Al-Hamra development will add 89,230 sq. meters, offering a mix of high-end retail, dining and entertainment in a pedestrian-friendly environment.听
Riyamarche will provide a further 21,840 sq. meters, while The Bellvue project, widely touted as Riyadh鈥檚 largest master-planned mixed-use project, will add 90,000 sq. meters by 2027.听
The report said Riyadh鈥檚 lifestyle retail market demonstrates robust fundamentals, with overall occupancy at 97 percent and food and beverage units averaging 76 percent.听
Average lease rates currently stand at SR2,400 ($639.57) per sq. meter, underscoring strong demand for quality retail space in the capital.听
鈥淭he lifestyle retail scene in 海角直播 continues to expand, boosted by overall consumer spending, which has increased by 7 percent year-on-year to SR1.4 trillion,鈥 said Jonathan Pagett, partner 鈥 head of retail advisory, MENA at Knight Frank.听
听
鈥淩iyadh is at the forefront of this retail resurgence, with all of the city鈥檚 flagship lifestyle developments at 100 percent occupancy or very close to it,鈥 he added.听
Pagett said this robust growth is expected to continue, as 海角直播 attracts leading global brands and taps the spending power of both tourists and residents.听
鈥淗owever, competition is fierce across the Kingdom, with a strong pipeline of projects in Riyadh, Jeddah and Al-Khobar. Creating unique retail offers with new-to-market concepts is critical to maintain strong performance and high retail sales densities,鈥 added Pagget.听
S&P Global has also raised concerns that oversupply, particularly in shopping malls, could weigh on the sector.听
Knight Frank underscored the importance of food and beverage in driving growth, pointing to the Dior Cafe pop-up in Riyadh and Ralph鈥檚 Coffee in King Abdullah Financial District as milestones in the Kingdom鈥檚 luxury retail and dining market.听
鈥淲ith the luxury retail and hospitality sectors flourishing, the Kingdom is fast becoming a key location for global brands seeking to establish a footprint in the Middle East. The combination of iconic retail outlets, high-end dining, and experiential venues puts 海角直播 firmly on the map as a leader in lifestyle retail,鈥 said Konstantinos Papadakis, associate partner 鈥 F&B consultancy, MENA at Knight Frank.听
Papadakis added that the arrival of luxury-branded cafes aligns with Vision 2030, which aims to position 海角直播 as a global tourist destination by the end of the decade.听
Jeddah鈥檚 rising market听
Jeddah added 24,100 sq. meters to its lifestyle retail market last year, increasing total completed space to 233,400 sq. meters across 17 developments.听
A further 205,600 sq. meters are expected to be delivered by seven new projects, bringing the total supply to 439,000 sq. meters by 2027.听
Knight Frank further projected that Jeddah Cove Waterfront, due for completion by 2027, will contribute 70,000 sq. meters as part of a larger 127,000 sq. meters lifestyle destination featuring dining, more than 200 shops, a cinema and a marina overlooking the Formula 1 circuit.听
鈥淲ith its enviable position on the Red Sea, Jeddah is a rising luxury and leisure hub that is ideally positioned to meet growing demand for lifestyle destinations and to attract international visitors,鈥 said Amar Hussain, associate partner 鈥 research, MENA at Knight Frank.听
Hussain added that Jeddah鈥檚 lifestyle retail sector enjoys a strong average lease rate of SR2,200 per sq. meter and overall occupancy stands at 81 percent, with F&B units averaging 75 percent occupancy.听
鈥淢irroring global trends, Jeddah鈥檚 consumers are demanding environments that offer experiential retail, integrating shopping with entertainment and dining. This shift is driving the development of lifestyle retail centers focused on offering leisure opportunities, predominantly through new and unique F&B concepts,鈥 said Papadakis.听
