Global Market Research Reports : Ken Research: Factors Affecting Retail Supply Riyadh

Friday, June 30, 2017

Oversupply and Downward Stress on Rental Rates to Trigger Cautions Outlook in Riyadh Retail Real Estate Market: Ken Research

The increasing household expenditure on retail outlets, easing government regulation on FDI in the retail sector and lack of recreational activities coupled with annual shopping festivals will have a positive impact on Riyadh’s Retail Real Estate Market.

The report titled “Riyadh Retail Real Estate Market to 2021- Oversupply and Downward Stress on Rental Rates to Trigger Cautions Outlook” by Ken Research suggests a robust CAGR of 17.2% and 14.8% in terms of retail supply and retail demand in Riyadh, respectively. The completion of major super-regional and regional malls including KAFD, ITCC, Jardin Mall, Mall or Arabia and Al Diriyah Festival Mall will boost retail supply in the coming years.

The evolution of the retail sector has transformed the Kingdom’s landscape from small and unorganized retail outlets to the development of large scale shopping malls with international brands, entertainment zones, theme parks and world class hypermarkets and supermarkets. Majority of the kingdom’s retail outlets, especially in Riyadh and Jeddah; are spread across super regional and regional malls. These formats have replaced traditional line stores and community shopping centers. High disposable income and government initiatives to diversify the economy and encourage foreign investment and ownership have led cities such as Riyadh and Jeddah to become the centre of attraction for international luxury brands.

The retail sector in Riyadh has witnessed robust performance during the review period despite the steady increase in gross leasing area. The primary reason for this trend is because shopping is considered to be one of the few available recreational activities in the city, indicating that the market can support a higher GLA per capita in the coming years.

The total retail supply in Riyadh inclined from 1.2 million square meters during 2012 to 1.5 million square meters of gross leasing area during 2016, registering a CAGR of 5.7% during the same period. Total occupied retail space inclined to 1.44 million square meters during 2016 from approximately 1.1 million square meters during 2012 achieving a CAGR of 7.1% during the same period.

Key Topics Covered in the Report:

Ksa Real Estate Market

Shopping Centres in Riyadh

Ksa Retail Real Estate Market

Riyadh Retail Real Estate Market

Real Estate Companies Malls Riyadh

Al Sadhan Malls in Riyadh

Riyadh Shopping Mall Market

Shopping Malls in Saudi Arabia

For further reading click on the link below:

https://www.kenresearch.com/manufacturing-and-construction/real-estate/riyadh-retail-real-estate-market/122993-97.html

Related Reports by Ken Research

https://www.kenresearch.com/manufacturing-and-construction/real-estate/qatar-real-estate-market/112182-97.html

https://www.kenresearch.com/manufacturing-and-construction/real-estate/philippines-real-estate-market-research-report/29319-97.html

https://www.kenresearch.com/manufacturing-and-construction/infrastructure/bouwinvest-real-estate-investment-management-bv/115221-97.html

Contact:

Ken Research

Ankur Gupta, Head Marketing & Communications

query@kenresearch.com

+91-124-4230204

Thursday, June 29, 2017

Increasing Retail Supply along with a Slow Conversion Rate is Expected to cause Retail Oversupply to Reach GLA of 439 thousand Sq M. by 2021: Ken Research

High disposable income and government initiatives to diversify the economy and encourage foreign investment and ownership will augmented retail expenditure in Riyadh.

Factors including location, neighboring competition, catchment area and efficiency of mall management are taken into consideration before the construction of retail development projects.

Saudi Arabian General Investment Authority allowed 100% FDI in the retail sector, giving international brand the ability to set up their outlets in the Kingdom without partnering with local entities

Ken Research in its latest study, “Riyadh Retail Real Estate Market Outlook to 2021” suggests that retail oversupply will continue to exist in the future. However, major mall developers have delayed large scale projects to reduce downward pressure on rent and augment occupancy rate across the city. Existing and new entrants will look to capitalize on competitively priced land across northeastern and southern Riyadh. Total retail supply in Riyadh is projected to achieve a CAGR of 17.2% during the period 2016-2021. Conversely, Retail demand is estimated to witness a CAGR of 14.8% during the same period.

The evolution of the retail sector has transformed the Kingdom’s landscape from small and unorganized retail outlets to the development of large scale shopping malls. The primary reason for this trend is because retailers have realized the increased number of visitors to regional and super regional malls as a result of integrated spaces and a shift in consumer shopping experience towards leisure and entertainment.

Saudi Vision 2030 with respect to feminization in the retail sector has targeted women participation in the workforce to increase from the current 22% to 30% in the future. Increasing female participation in the retail sector will positively impact growing number of female owned businesses coupled with higher income and spending power. A crucial factor that has further aided retail sales is the country is the lack of recreational activities available across the country. The Kingdom has banned cinemas and other forms of recreation and entertainment. Mall and community center shopping is one of the few socially acceptable and widely accessible leisure and recreational options available to families within the country.