{"id":96187,"date":"2025-04-20T00:00:00","date_gmt":"2025-04-20T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2025\/04\/20\/retail-real-estate-demand-to-maintain-momentum-in-the-next-two-years-sp\/"},"modified":"2025-04-20T00:00:00","modified_gmt":"2025-04-20T00:00:00","slug":"retail-real-estate-demand-to-maintain-momentum-in-the-next-two-years-sp","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2025\/04\/20\/retail-real-estate-demand-to-maintain-momentum-in-the-next-two-years-sp\/","title":{"rendered":"Retail real estate demand to maintain momentum in the next two years -S&P"},"content":{"rendered":"

<\/strong>Retail <\/strong>real estate demand in Saudi Arabia is expected to remain strong <\/strong>throughout 2025 <\/strong>and 2026<\/strong>, according to a recent report<\/a> from S&P Global. Major global retailers continue to enter the market, attracted by the Kingdom\u2019s large consumer base.<\/p>\n

(** Tap or click the headline above to read this story with all of the links<\/strong> to our background and outside sources.)<\/p>\n

The agency expects a favorable retail consumption outlook, particularly in entertainment <\/strong>and lifestyle categories<\/strong>, buoyed by the Kingdom\u2019s youthful and growing population. Pro-investment measures, such as the new investment law<\/a>, are also expected to accelerate the sector\u2019s expansion, it added.<\/p>\n

The drivers: <\/strong>Saudi Arabia\u2019s focus on infrastructure development is fueling demand for retail real estate, with major cities such as Riyadh and Jeddah seeing a surge in new developments. The rapid expansion of mixed-use developments and gigaprojects like Neom, Diriyah Gate, and the Red Sea Project is expected to ramp up demand, S&P said.<\/p>\n

REMEMBER- <\/strong>The Kingdom\u2019s gigaprojects include more than 1 mn new residential units, 362k hotel keys, upwards of 7.4 mn sqm of new retail space, and more than 7.7 mn sqm of new office space to accommodate population growth and booming tourism and business activities. These numbers are expected to rise further<\/a> with the upcoming 2030 World Expo and the 2034 FIFA World Cup, as both events are projected to trigger a new wave of projects in Riyadh.<\/p>\n

E-commerce is playing an increasingly important role in the sector:<\/strong> The broader MENA region\u2019s e-commerce market was valued at USD 1.8 bn in 2024, S&P said, citing a joint report by Flowwow and Admitad. Saudi Arabia showed momentum with 9% y-o-y growth, outpacing its regional competitor, the UAE. <\/p>\n

Changing the game:<\/strong> The growing popularity of e-commerce and the shift towards experience-driven retail is pressuring traditional malls to adapt or risk reduced footfall and rental yields. The shift towards online shopping is leading developers to incorporate hybrid models into their retail space design, which is expected to reel in additional demand, S&P said.<\/p>\n

It\u2019s not looking too bad for retail, though: <\/strong>Total retail sales volumes are expected to hit a compound annual growth rate of 4.4% through 2027, with pop-up stores gaining popularity in major malls, Deloitte said in an earlier report<\/a>. Supply volumes are steadily growing in the country\u2019s retail space, while demand remains \u201crelatively stable,\u201d which together are keeping price increases at bay.<\/p>\n

Still, <\/strong>headwinds lie ahead<\/strong>: Increased supply is expected to put downward pressure on rental rates \u2014 particularly in secondary locations. Global economic uncertainty, high construction costs, and persistent volatility in oil prices could potentially dampen government spending and impact non-oil growth. The agency also expects the weakening global macroeconomic environment to impact consumer spending, along with the overall local retail sector. <\/p>\n

To navigate these challenges and maintain long-term competitiveness<\/strong>, firms should adopt \u201ccareful planning and strategic market positioning.\u201d Developers and landlords need to prioritize product differentiation and develop experience-based retail offerings, S&P argues.<\/p>\n","protected":false},"excerpt":{"rendered":"

This will be driven by population growth, tourism inflows, and the expansion of mixed-use developments and gigaprojects<\/p>\n","protected":false},"author":1,"featured_media":96188,"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":[2574],"tags":[10,106,211],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-96187","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate","tag-enterpriseam-ksa","tag-real-estate","tag-retail","wpautop","entry"],"acf":{"mongo_id":"49f3e899-73e6-4d5b-89cf-3992cb5d57e2","order":"7","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2025\/4\/1237.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Retail real estate demand to maintain momentum in the next two years -S&P","related_issue":[96175],"teaser":"This will be driven by population growth, tourism inflows, and the expansion of mixed-use developments and gigaprojects","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2025\/4\/.eae10c5f-ab35-4289-a235-ad6c189a4c1c.mp3"},"yoast_head":"\nRetail real estate demand to maintain momentum in the next two years -S&P - 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