The sports and entertainment sectors will be key drivers in Riyadh retail rents rising by 28 percent by 2026, according to new research, with rates already up 3 percent in the past year.
“The total existing retail supply in Riyadh stands at 3.6 million square meters, with around 27,050 square meters of retail space entering the market in Q1 2024,” real estate consultancy Knight Frank said in a report.
“[We] forecast that the capital’s retail stock will grow by 28 percent to 4.6 million square metres by 2026.”
In contrast to the capital, Jeddah and Dammam have seen drops in the rental market over the past year, with occupancy rates dropping by 1 percent in both cities to 84 percent and 89 percent respectively, the report says.
Average rental rates in Riyadh’s malls rose 3 percent to SAR2,725 per square metre ($727) over the past year, while average rents fell 7 percent to SAR2,465 per square metre in Jeddah and 1.3 percent to SAR2,275 per square metre in Dammam.
“The 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,” said Faisal Durrani, Knight Frank’s regional head of research.
Durrani said the government’s sports and entertainment expansion was a key factor driving the retail property market, including new cinemas, concert halls, theme parks and sports complexes.
Sports and entertainment are a key part of government ambitions to push tourism to 10 percent of GDP by 2030.
The giga-projects at the heart of the expansion strategy include a sports and entertainment city outside Riyadh called Qiddiya, which will contain a sports stadium and esports and gaming district.
Riyadh also has a Sports Boulevard that is building the world’s tallest sports tower.
An esports ‘World Cup’ is currently taking place in a district of Riyadh called Boulevard City.
