RETAIL

A number of high profile retail projects are being developed in Saudi Arabia, which will transform the sector, creating new and innovative experiences for affluent consumers and tourists.

Last year, the Public Investment Fund (PIF) unveiled the Jeddah Central Project, a SAR 75 billion multi-use project spread over an area of 5.7 million square metres of land overlooking the Red Sea.

The project features an opera house, a museum, a sports stadium, and an oceanarium, and will shape the operation of promising economic sectors including tourism, entertainment, culture, and sports.

“In addition, the city will benefit from the building and development of modern residential areas, encompassing 17,000 residential units and diversified hotel projects that offer more than 2,700 hotel rooms, and the provision of integrated solutions for the business sector,” according to the Saudi Press Agency. “The project will feature a world-class marina and stunning beach resorts, as well as restaurants and cafes, and diverse shopping options.” 

The project’s waterfront is 9.5 kilometres (km) long, and will include a promenade, a marina to host local and international yachts, and a 2.1-km long beach. Open spaces and public services make up 40% of the project area, with the provision of designated walking areas to create a pedestrian-friendly environment.

“The project master plan reflects the Hijazi essence of urban fabric and blocks that characterise the historic city of Jeddah in a contemporary interpretation designed to the highest international standards,” the SPA said. It will also deploy the latest technologies and adopt world-class sustainability programmes, in line with the objectives of the Saudi Green Initiative.
  

DIRIYAH SQUARE

Similarly, the Diriyah Gate Development Authority (DGDA) launched its Diriyah Square development, part of the Diriyah project that will open in 2024. Diriyah is the birthplace of Saudi Arabia, centered around the UNESCO World Heritage Site of At-Turaif, and is the site of the first Saudi state.

“Bringing together wonderful experiences for young and old, Diriyah Square is the gathering place of the Diriyah masterplan hosting 450+ of the world’s finest global retail brands, complemented by an additional 100 authentic local Saudi artisan souks,” DGDA said. “The district will deliver a complete lifestyle offering; from leisure and entertainment,ultra-luxurious hotels, and places to work and live – all within an iconic destination steeped in heritage, culture.”

Jonathan Timms, president of Diriyah Development Company, said the project is cultivating compelling opportunities for retailers, brands and operators to call Diriyah Square home. 

“We are going the extra mile to ensure we provide the best location for ambitious brands, collaborating to create exceptional customer experiences,” Timms said. “This one-of-a-kind project will present over 400 of the finest retail brands from across the kingdom and around the world in an authentic and intimate environment of streets and squares, whilst we protect and celebrate the distinctive character of Diriyah.

GROWING SECTOR

The massive developments are under way as Saudi Arabia undergoes a rapid retail transformation, and the markets see the arrival of new players drawn to the kingdom’s affluent population and changing tastes.

The retail sector was the third fastest growing sector in the kingdom in the third quarter of 2021. Wholesale and retail trade, restaurants and hotels surged 10.8% in Q3, compared to the same period last year, helping the Saudi economy expand 7% during the quarter, according to data from the National Centre for Statistics & Information.

The sector is about to expand more quickly as COVID-19 pressures ease. 

“The food and grocery retail is expected to reach SAR 246.9 billion by 2025 at a CAGR of 4.1%,” according to Marmore Intelligence. “Other retail (excluding food and grocery) is the fastest growing sector, which is expected to grow at 5.9% CAGR between 2020 and 2025 from SAR 63.5 billion to SAR 84.6 billion.”

The country is also in the midst of a rapid build-up of retail space. Real estate consultancy Jones Lang LaSalle estimates that new retail floorspace delivered in 2021 was higher across each of the four major markets versus the preceding year. Around 180,000 square metres(sqm) was delivered in Riyadh, 195,000 sqm in Jeddah, 24,000 sqm in DMA, and 58,000 sqm in Makkah.

In line with trends evolving globally, some retail centres in the kingdom have been developing their F&B offerings to create a more social experience for visitors,” JLL said in its latest report on Saudi Arabia. “Such centres tend to benefit from higher footfall and dwell times, as well as higher consumer spending, when compared with traditionally positioned retail assets.