The retail market in Riyadh saw a pickup in demand, with average rental rates increasing by 4.2% year on year during the third quarter of 2024, according to Knight Frank. In its report, the agency said that rental prices in the capital increased to SR2,845 ($757.24) per square meter as it continues to grow as a central hub for business and tourism in Saudi Arabia’s Vision 2030 initiative. 

The increased demand for retail space in Riyadh has also been accompanied by a great increase in occupancy rates. As of the third quarter, occupancy in the city’s retail spaces stands at 92%, five points higher than in the period before. This growth is notable in prime locations such as Riyadh Park and Al Nakheel Mall, which have nearly remained fully occupied. Strategically located, offering a suitable mix of tenants, and strong entertainment, these malls are major retail destinations in the city. 

The other thing is retail stock increase in Riyadh, which grows to 22,500 square meters of space. In the capital, by 2026, the total retail space will amount to 4.3 million square meters, up from 21%. Some of the areas driving the growth are along King Fahd Road, Olaya Street, and northern districts, which are experiencing growth and higher consumer spending. 

Contrastingly, growth in other main cities of Saudi Arabia has been more minor. Jeddah’s rates for rental rose by 1.2% to SR2,525 per square meter; its occupancy decreased slightly to 86%. According to the report, the fluctuations of the market in Jeddah resulted from changing consumers and growing retail space supply. Jeddah retail stock is expected to grow up by 2026 to 3.3 million square meters with a further 475,000 square meters. 

Meanwhile, in Dammam, the occupancy level remained stable at 90% but rental prices declined slightly by 0.7% to SR2,285 per square meter. Despite this, demand for high-traffic retail spaces remains steady, and the city is expected to see retail stock grow to 1.3 million square meters by 2026. Retail space expansion in Dammam, along with nearby Al Khobar, is family-oriented retail, moving in line with the larger efforts of the Kingdom toward community engagement and leisure options through retail settings. Knight Frank reported that the retail sector in Saudi Arabia continues to grow as its consumer demand increases and the cities continue developing.