Riyadh’s retail sector is dominated by secondary grade malls. There are more than 35 community malls (malls less than 25,000 GLA in Riyadh. These secondary malls typically less than 25,000 m² GLA with a hypermarket.
Riyadh currently has a total retail mall GLA of 2.3 million sqm. Malls account for almost two-thirds of the total retail GLA in Riyadh. Even among the mall based GLA, only a small proportion of malls can be categorized as Grade A i.e., high quality retail space.
The current and past years had been a challenging phase for all real estate asset classes in Riyadh, and retail is no exception to this trend. However, retail rents in premier malls have displayed high levels of resilience and remained relatively stable so far, though occupancies have taken a hit. As a portion of the total retail sales in the market are being catered to the e-commerce market, brick-and-mortar retail venues are struggling to maintain their sales. Food delivery companies like Talabat and Deliveroo is expanding their reach to other sectors like Grocery
Unlike Dubai, which has higher ratio of super-regional malls, Riyadh currently has a low share of super-regional malls. Only 19% of the current retail mall supply are super-regional malls. Riyadh is lacking super-regional destination malls. However, in the coming four years, there are many super-regional malls planned. The Avenues – Riyadh is one such mall which is expected to commence operations in 2023 / 2024, located at a prime position overlooking the intersection of King Salman Road and King Fahad Causeway with a leasable area of 400,000 sqm. The project is expected to become one of the largest commercial malls in Saudi Arabia and will include hotels, residential apartments, medical facilities, offices.
A key goal for Riyadh is to develop its regional leadership role and establish significant points of global influence, from hosting major Inter-Governmental, Sporting and Business events, to improving the city’s global appeal and resonance, while making steps forward in quality of life through major urban restructuring. Much of the infrastructure investment in public transport systems and green spaces has been intended to promote Riyadh’s liveability, affluence and status. Riyadh has recently hosted the U20 Summit. Riyadh has recently released a bid to hold the 21st Asian Games.
Table of Content:
Section 1 – Review of Retail Competition in Riyadh
Snapshot of Riyadh Mall based retail market overview with a relevance to these locations
Population in the trade area and its growth
Existing Centers (analysis of 3-4 shopping malls that can be defined as competitors in the trade area)
Positioning of the current mall supply in the vicinity
Identification of retail gaps in trade area
To plot and profile key retail facilities located within Riyadh
Section 2 – Population Analysis & Trade Area Analysis
Site location maps and existing surrounding land uses
Accessibility and visibility; proximity to relevant demand generators
Accessibility maps; site characteristics
To review and comment on the composition of Riyadh’s population and provide socio economic and demographic indicators (gender / age / nationality / etc.)
To define Riyadh population annual actual and forecast growth from 2021 to 2027
To distribute Riyadh population by density / wealth / zone and generate heat mapping illustrations
To delineate the catchment areas of the site into Primary & Secondary Catchment Area and to estimate the Retail Potential for the same.
Section 3 – Consumer Research Analysis
To define and estimate average retail expenditure per household / per capita / total city
To define and estimate average disposable income per household / per capita
To forecast annual growth rates for retail spending and disposable income 2021 to 2027
Age/ gender/ nationality/ income level/ family size/ size of party visiting
How often visit – for what (shopping/ eating out/ entertainment), when (weekday/ weekend), with whom?
How much does a shopper spend?; Which mall they tend to shop in
How do they go to the shopping mall (walking, taxi, private car etc.); Satisfaction with current visit and identification of need gaps
What did they do at shopping malls (activities – shopping – types of outlets visited, entertainment, food court)?
What offering was most liked and why? Satisfaction with mostly visited place versus other competitors (if visited prior)
Sources of awareness
Media / Social Media habits
Interests / Leisure time spending
Entertainment habits & interests (especially what they want when they visit Malls and what they would like to see in Malls)
F&B / Restaurant / Eating Out – Habits & Preferences
Section 4 – Recommendations & Conclusions
To conduct a Huff’s Gravity Modelling exercise to determine the optimal Mall GLA and corresponding Footfall by Zones