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- Prime locations like Riyadh Park and Al Nakheel Mall have maintained near-full occupancy
- Supply of retail space in the capital grew with the addition of 22,500 sq. meters
RIYADH: The retail market in Riyadh saw a five-percentage-point increase in occupancy rates, reaching 92 percent by the end of the third quarter, according to a new report by Knight Frank.
The report also highlighted a 4.2 percent year-on-year rise in average rental rates, which reached SR2,845 ($757.24) per sq. meter.
This increase reflects the city’s growing appeal as part of Saudi Arabia’s Vision 2030, aiming to transform Riyadh into a leading business and tourist hub.
“Over the last 12 months, the retail market in Riyadh has experienced a steady rise in rental rates, particularly in well-located regional and super-regional malls,” Knight Frank stated.
The firm pointed to prime locations like Riyadh Park and Al Nakheel Mall, which have maintained near-full occupancy thanks to their strategic positions, diverse tenant mix, and entertainment offerings.
Meanwhile, the supply of retail space in Riyadh grew with the addition of 22,500 sq. meters, bringing the city’s total retail space to 4.3 million square meters by 2026, a 21 percent increase.
“Riyadh’s retail market is growing along key corridors like King Fahd Road, Olaya Street, and northern districts, driven by urban expansion and rising consumer spending,” Knight Frank said.
In comparison, Jeddah’s retail market saw a more modest increase in rental rates of 1.2 percent, reaching SR2,525 per sq. meter. However, occupancy in the city declined slightly by 1 percentage point to 86 percent.
The report noted that Jeddah’s retail market is undergoing shifts influenced by changing consumer preferences and an increased supply of retail space.
Jeddah’s retail stock is expected to grow by 475,000 sq. meters by 2026, bringing the total to 3.3 million sq. Meters.
In Dammam, occupancy remained stable at 90 percent, but rental rates saw a slight decline of 0.7 percent, reaching SR2,285 per sq. meter. Despite this, demand for high-traffic locations remains steady.
Retail stock in Dammam stands at 1.28 million sq. meters and is expected to reach 1.3 million sq. meters by 2026.
“Dammam and Al Khobar are seeing a rise in diverse entertainment options, reflecting the Kingdom’s goal to create engaging, family-friendly retail that incorporates both leisure and community interaction,” Knight Frank added.