Saudi Arabia’s retail sector has seen an increase in space in the first half of this year, according to a report by real estate firm Jones Lang LaSalle.
Makkah’s gross leasable area rose by 17,500 square metres, totalling to 1.4 million square metres.
Changes in visa rules and the easing of pandemic restrictions have invited more pilgrims to perform Umrah this year, particularly during the Holy Month, said the report.
An addition of 55,000 square metres to Riyadh’s gross leasable area brought its retail portfolio to span 3.3 million square metres, said the report.
Although its vacancy rates remained double digits in the second quarter, the capital recorded a quarter-over-quarter decrease, which resulted in declines in rent.
After an addition of 16,000 square metres, Jeddah’s retail stock covered 1.7 million square metres, with rents increasing by 3 per cent across the city.
Gross leasable area in the Dammam Metropolitan Area remained at 1.2 million square metres.
Shopping centres in Dammam Metropolitan Area and Makkah reported stable performances during the first six months.
In efforts to attract and retain retail tenants, shopping mall landlords have introduced food and beverage and entertainment concepts within malls to maintain and increase footfall.
Shopping centres with such concepts integrated have recorded higher occupancy and footfall rates, said the report.
“For the first time in two years after the easing of restrictions relating to the Covid-19 pandemic, the kingdom is allowing over one million pilgrims to perform Hajj this month,” said Khawar Khan, head of research of Middle East and North Africa and Turkey at JLL.
“Not only is this expected to provide a boost to Makkah’s retail sector, but it should also help the kingdom to meet its target of tripling foreign visitors to 12 million this year.
“Overall, the higher number of visitors will likely have positive implications for Saudi Arabia’s retail market.”
Over April and May, point-of-sales transactions rose by 16 per cent year-over-year, ultimately valuing SAR91.8 billion across the kingdom.
