Saudi Arabia’s lifestyle retail landscape has “exploded” in recent years, as the kingdom’s economic transformation is underway, with new commercial developments already delivered and more supply currently being developed, according to a new report.

The kingdom is currently working on at least 184,000 square metres of new retail developments that are centred on food and beverage outlets, entertainment and the public realm, which are expected to be delivered by 2025, Knight Frank said in its Riyadh and Jeddah Retail Market Review.

The kingdom has rolled out a series of development projects as part of its Vision 2030 strategy, to transform its economy. With developing a world-class lifestyle at the heart of Saudi’s transformative vision, cities like Riyadh and Jeddah have seen the entry of new commercial spaces that blend retail, dining and leisure.

“At the heart of the Saudi government’s transformative vision for the kingdom sits the creation of world-class lifestyle amenities to complement the phenomenal transformation of the kingdom’s urban realm,” said Faisal Durrani, Partner – Head of Research, MENA.

“[The] lifestyle retail developments that now dot the cities across the country offer a glimpse into the cosmopolitan vibe that is slowly becoming an entrenched part of the rapidly evolving societal fabric.”

Food and beverage scene

In Riyadh alone, around 84,800 square metres of lifestyle-led retail developments across eight projects have been completed over the last 12 months. Riyadh started to see a surge in lifestyle retail developments in 2019 and since then, the lifestyle retail scene in the city has “exploded,” Knight Frank said.

“A significant contributor to this evolution is Riyadh’s burgeoning food and beverage scene. The city now boasts a total supply of 388,000 square metres of food and beverage led lifestyle retail developments, with a specific focus on parks and gardens, the public realm and an array of lifestyle amenities,” said Jonathan Pagett, Partner, Retail Advisory Saudi Arabia.

In Jeddah, four projects also added 41,700 square metres to the retail scene this year. The lifestyle retail scene in the city began to take off in 2020.

Since 2020, at least 10 lifestyle retail centres have opened in Jeddah, each featuring fountain-based attractions, retail, dining options and attractive promenades. Five more lifestyle retail developments are expected to be announced in the Red Sea city over the next 12 months, with a total space of 131,700 square metres.

Driving the shift

“The driving force behind this transformative shift is the younger generation’s inclination towards outdoor experiences and an active lifestyle,” said Pagett.

“Riyadh and Jeddah are responding to this demand by creating multifaceted spaces that seamlessly blend retail, dining and leisure.”

The demand for lifestyle retail space is significant as well, with developments in Riyadh and Jeddah seeing F&B outlets running at an average occupancy rate of 86%.

(Writing by Cleofe Maceda; editing by Seban Scaria) seban.scaria@lseg.com