Riyadh Retail Market Outlook to 2023

The report titled "Riyadh Retail Market Outlook to 2023 - Dominance of Online Shopping and Emergence of International Brands to Fuel Demand"provides information on overview of the overview of retail market, factors influencing the sector of retailing in Riyadh, supply and demand assessment, future potential, market insight and performance, average rental rates, average occupancy rates of malls in Riyadh, retail outlook, opportunities and future development trends, key upcoming malls in Riyadh city,  recommendations regarding success factors of retail market in Riyadh, key features and characteristics of retail space in Saudi Arabia and case studies of 6 retail centers in Riyadh city. The report concludes with the competitive analysis of case studies; cross comparison within retail malls in Riyadh and with heat map analysis for case studies.

Overview of Retail Market in GCC and Demographics of Riyadh City

The city of Riyadh is located in the central part of Saudi Arabia and the Arabian Peninsula as a whole and is in the eastern area of Najd. The city has experienced unprecedented growth in the population, as between 1930 and the early 21st century the population has increased from 27,000 to over 6.5 million. Riyadh has a young population with more than half of residents under the age of 20 years old and less than one-fifth being older than 60.

Factors Influencing the Sector of Retailing in Riyadh: Lifting ban from cinemas in Saudi Arabia has opened doors for investment in the entertainment sector, thus reflecting a great potential in the demand for retail sector in Riyadh city. Central region was observed as the most attractive area for establishment of retail projects owing to quality infrastructure, financial districts, high population and better connectivity with other regions. Some of the other major factors influencing Riyadh retail market include increase in retail spending, implementation of VAT, tourism, population and demographics, rising disposable income, emerging supermarkets and hypermarkets, entrance of international brands, relaxation of investment regulation, tenant mix and climate conditions.

Supply and Demand Assessment: The retail market in Riyadh has witnessed oversupply of retail space during 2013-2018. The retail supply has escalated at a CAGR of 11.1% from 2013 to 2018 owing to government implementing several key initiatives such as allowance of 100.0% FDI in retail sector and lifting ban from cinemas. The demand has although declined from last year primarily due to implementation of VAT by the government. There has been oversupply in terms of retail units within the country due to a deceleration in economic growth triggered by the fall in oil prices. In future, with implementation of Saudization policy by the government, increase in number of cinemas and other factors, it is anticipated that the supply-demand gap will decline in the retail market in Riyadh.

Market Insight and Performance: After witnessing a growth for the last four years, the demand for retail space in Riyadh witnessed a decline in the year 2018 owing primarily to introduction of VAT coupled with other factors such as rising e-commerce retail. Among different mall categories, super-regional malls had the highest occupancy rate in 2018, followed by regional malls and community centers. Average rentals rates have also declined over the last year reflecting the decline in demand. With new reforms kicking in, the retail market will witness a surge in the near future.

Competition Analysis of Retails in Riyadh

Over the past few years, the landscape of Riyadh’s retail sector has transformed from a conventional market place comprising unorganized independent stores and shops to organized large-scale shopping malls and hypermarkets that house the largest global brands. The retail sector in Riyadh is now highly competitive. Given the fragmented nature of Riyadh’s retail sector and rising popularity of organized retail, consolidation is likely with larger players growing inorganically to capture market share. These players keep innovating on strategies like product differentiation, price-related offers along with placing the mall distinctively in the minds of patrons through various entertainment packages like amusement parks and food courts.

Future Outlook and Development Trends

Despite facing difficulties over the past years, the retail market in the KSA is expected to maintain an overall positive outlook due to multiple reforms that are being presently planned and executed by the Saudi Arabian government. The most prominent of these reforms include allowance of 100.0% FDI in retail sector, lifting of ban from cinemas and implementation of Saudization. These reforms over the long term aim at overcoming the multiple obstacles that are being faced by the retail sector such as the decline in the rental rates and the oversupply situation. Emergence of international brands has been gaining popularity in the retail market. Some of the key expected upcoming retail projects in the KSA include Cordoba Boulevard, Al Diriyah Festival City Mall, City Center Ishbiliyah, and Mall of Saudi.

Key Topics Covered in the Report

• Overview of retail market
• Factors influencing Riyadh retail market
• Demand and supply assessment in Riyadh retail market
• Future market potential
• Market insight and performance
• Average rental rates for malls and restaurants
• Key upcoming malls in Riyadh
• Future trends in retail market
• Recommendations regarding success factors of retail market in Riyadh
• Key features and characteristics of retail space in Saudi Arabia
• Case studies of major retail centers in Riyadh
• Pure Mall
• Al Oruba Square
• Canary Center
• Localizer Mall
• Granada Center
• Centria Mall
• Competitive Analysis of Case Studies
• Cross Comparison within Retail Malls in Riyadh
• Heat Map Analysis of Riyadh Retail Malls