Increasing Retail Supply along with a Slow Conversion Rate is Expected to cause Retail Oversupply to Reach GLA of 439 thousand Sq M. by 2021: Ken Research
High disposable income and government initiatives to diversify the economy and encourage foreign investment and ownership will augmented retail expenditure in Riyadh. Factors including location, neighboring competition, catchment area and efficiency of mall management are taken into consideration before the construction of retail development projects.
Saudi Arabian General Investment Authority allowed 100% FDI in the retail sector, giving international brand the ability to set up their outlets in the Kingdom without partnering with local entities Ken Research in its latest study, “ Riyadh Retail Real Estate Market Outlook to 2021� suggests that retail oversupply will continue to exist in the future. However, major mall developers have delayed large scale projects to reduce downward pressure on rent and augment occupancy rate across the city. Existing and new entrants will look to capitalize on competitively priced land across northeastern and southern Riyadh. Total retail supply in Riyadh is projected to achieve a CAGR of 17.2% during the period 2016-2021. Conversely, Retail demand is estimated to witness a CAGR of 14.8% during the same period.
The evolution of the retail sector has transformed the Kingdom’s landscape from small and unorganized retail outlets to the development of large scale shopping malls. The primary reason for this trend is because retailers have realized the increased number of visitors to regional and super regional malls as a result of integrated spaces and a shift in consumer shopping experience towards leisure and entertainment. Saudi Vision 2030 with respect to feminization in the retail sector has targeted women participation in the workforce to increase from the current 22% to 30% in the future. Increasing female participation in the retail sector will positively impact growing number of female owned businesses coupled with higher income and spending power. A crucial factor that has further aided retail sales is the country is the lack of recreational activities available across the country.
The Kingdom has banned cinemas and other forms of recreation and entertainment. Mall and community center shopping is one of the few socially acceptable and widely accessible leisure and recreational options available to families within the country. Key Topics Covered in the Report: Al Sadhan Malls in Riyadh Riyadh Shopping Mall Market Growth Shopping Centres in Riyadh Riyadh Retail Mall Demand Riyadh Retail Supply Gross Leasable Area Shopping Malls in Saudi Arabia Future Outlook Retail Supply Riyadh Case Study Othaim Mall in Riyadh Community Center Riyadh Market Super Regional Malls Market Saudi Arabia
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