RIYADH: A recent report by Knight Frank reveals that the retail market in Riyadh experienced a five-percentage-point surge in occupancy rates, culminating in a 92 percent occupancy by the end of the third quarter.
The report further underscores a 4.2 percent year-on-year escalation in average rental rates, which now stand at SR2,845 ($757.24) per square meter. This uptick mirrors Riyadh's escalating allure as a pivotal component of Saudi Arabia's Vision 2030, which aims to metamorphose the city into a preeminent business and tourism nexus.
"Over the past 12 months, Riyadh's retail sector has witnessed a consistent escalation in rental rates, notably in strategically positioned regional and super-regional malls," Knight Frank elucidates.
The firm highlights prime locales such as Riyadh Park and Al Nakheel Mall, which have sustained near-complete occupancy due to their strategic locations, diverse tenant portfolios, and comprehensive entertainment offerings.
Simultaneously, the retail space supply in Riyadh expanded with the addition of 22,500 square meters, projecting the city's total retail space to reach 4.3 million square meters by 2026, marking a 21 percent augmentation.
"Riyadh's retail landscape is burgeoning along pivotal corridors such as King Fahd Road, Olaya Street, and northern districts, propelled by urban expansion and escalating consumer expenditure," Knight Frank articulates.
In contrast, Jeddah's retail market registered a more subdued increase in rental rates of 1.2 percent, reaching SR2,525 per square meter. However, occupancy in the city marginally declined by 1 percentage point to 86 percent.
The report indicates that Jeddah's retail sector is undergoing transformations influenced by evolving consumer inclinations and an augmented supply of retail space.
Jeddah's retail stock is anticipated to expand by 475,000 square meters by 2026, elevating the total to 3.3 million square meters.
In Dammam, occupancy remained steadfast at 90 percent, but rental rates experienced a slight dip of 0.7 percent, settling at SR2,285 per square meter. Notwithstanding this, demand for high-traffic locations remains robust.
Dammam's retail stock currently stands at 1.28 million square meters and is projected to reach 1.3 million square meters by 2026.
"Dammam and Al Khobar are witnessing an upswing in diverse entertainment options, reflecting the Kingdom's objective to foster engaging, family-oriented retail that integrates both leisure and communal interaction," Knight Frank concludes.
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