{"id":87799,"date":"2024-07-14T00:00:00","date_gmt":"2024-07-14T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2024\/07\/14\/retailers-feel-the-pinch-as-riyadh-rents-rise\/"},"modified":"2024-07-14T00:00:00","modified_gmt":"2024-07-14T00:00:00","slug":"retailers-feel-the-pinch-as-riyadh-rents-rise","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2024\/07\/14\/retailers-feel-the-pinch-as-riyadh-rents-rise\/","title":{"rendered":"Retailers feel the pinch as Riyadh rents rise"},"content":{"rendered":"

Retailers grapple with rising rents as Riyadh market heats up:<\/strong> Regional retailers and mall operators in the Kingdom are now facing higher rents, with average rental rates in Riyadh\u2019s retail market increasing by 3% y-o-y to SAR 2.7k per sqm for regional and international malls, according to Knight Frank\u2019s Summer 2024 Saudi Arabia Retail Market Overview (pdf)<\/a>.<\/p>\n

The rationale: <\/strong>The growth in Riyadh\u2019s retail market is tied to the expansion of the entertainment sector, including new cinemas, concert halls, theme parks, and sports complexes, contributing to non-oil GDP growth, the release read. \u201cThe rapidity of the evolution of the retail and food and beverage landscape in Saudi Arabia cannot be overstated and Riyadh sits at the heart of this phenomenal growth, which is also powering the Kingdom\u2019s economic diversification efforts,\u201d explained Knight Frank\u2019s Partner and Head of Research for MENA, Faisal Durani.<\/p>\n

\u0650Despite soaring rent prices, occupancy rates have risen to 90% y-o-y, thanks to a tourism <\/strong>boom<\/strong>, Knight Frank said in the report. Supply of retail spaces is growing, however, with 27.1 sq km added to the market in 1Q 2024, bringing Riyadh\u2019s total retail space to 3.6 mn sqm. Retail space supply is expected to grow an additional 28% by 2026 to reach a total 4.6 mn sqm. <\/p>\n

IN CONTEXT- <\/strong>The Kingdom saw a 56% y-o-y increase<\/a> in tourist arrivals in 2023, on the back of government initiatives such as a USD 800 bn injection<\/a> in developing fresh tourist destinations like Neom, The Red Sea, Diriyah and Qiddiyah. The Tourism Ministry recently doubled its 2030 targets<\/a> to 150 mn tourist trips, split between 80 mn domestic and 70 mn foreign travelers.<\/p>\n

The e-commerce market is to thank too<\/strong>: The sector grew 28% y-o-y to SAR 157 bn in 2023, on the back of digitalization, and gov\u2019t support for digital retail infrastructure.<\/p>\n

Jeddah and Dammam aren\u2019t following the same trajectory:<\/strong> Each city\u2019s retail occupancy rates declined 1 percentage point y-o-y, with Jeddah reaching 84% and Dammam 89%, in the last 12 months. Rent prices in these cities are lower compared to the Kingdom\u2019s capital, with Jeddah\u2019s rents dropping by 7% to reach SAR 2.5k per sqm and Dammam by 1.3% to SAR 2.3k per sqm in the same period.<\/p>\n","protected":false},"excerpt":{"rendered":"

Average rental rates in Riyadh\u2019s retail market rose 3% y-o-y<\/p>\n","protected":false},"author":1,"featured_media":87800,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2671],"tags":[10,106,211,2696,7],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-87799","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-retail","tag-enterpriseam-ksa","tag-real-estate","tag-retail","tag-riyadh","tag-tourism","wpautop","entry"],"acf":{"mongo_id":"38e9d2d3-5215-4feb-9c18-fd646516aa5f","order":"5","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/7\/963.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Retailers feel the pinch as Riyadh rents rise","related_issue":[87790],"teaser":"Average rental rates in Riyadh\u2019s retail market rose 3% y-o-y","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2024\/7\/.0b855879-fc8b-4c62-a13d-3802daff7680.mp3"},"yoast_head":"\nRetailers feel the pinch as Riyadh rents rise - 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