Knight Frank: 394,900 square metres of new lifestyle retail supply expected by 2027 in Riyadh and Jeddah

Riyadh and Jeddah are leading a transformative shift in Saudi Arabia’s lifestyle retail sector, redefining the retail landscape with 394,900 sqm of upcoming lifestyle retail developments that feature food and beverage outlets, entertainment options, and vibrant public spaces, all set to be completed by 2027, according to Knight Frank’s Riyadh and Jeddah Lifestyle Retail Market Review.

Faisal Durrani, Partner – Head of Research, MENA says: “Fuelled by the transformative ambitions of Vision 2030, Saudi Arabia’s lifestyle retail market has been undergoing a remarkable evolution since 2021, with Riyadh and Jeddah alone adding over 148,400 sqm of new retail space in the last two years.

“These spaces are no longer just shopping destinations; they have become hubs for entertainment, gastronomy, and social interaction. This transformation is closely aligned with the government’s Vision 2030 initiatives, which aim to enhance the quality of life by driving investment in entertainment, lifestyle, and public realm activities, ultimately creating dynamic urban centres that cater to evolving consumer demands”.

Knight Frank’s analysis shows that casual dining options are available in 52% of Riyadh’s developments and occupancy rates averaging 96%. Over the past 24 months, Riyadh saw the completion of 73,400 sqm of lifestyle-focused retail developments across five projects, while Jeddah added three projects totalling 75,000 sqm.

Jonathan Pagett, Partner – Retail Advisory, KSA, explains: “In Riyadh, the existing lifestyle retail supply stands at 452,800 sqm with developments like Boulevard World and Boulevard City being prime examples, incorporating retail and F&B offerings that foster a dynamic relationship between entertainment and retail”.

Riyadh’s average lease rate for lifestyle retail developments, Knight Frank says, stands at SAR 2,360 per square metre, reflecting a strong market demand. F&B outlets continue to dominate this sector, with a significant share of this retail typology, making up 84% of the total space, with casual dining (52%) and cafes (20%) being the most popular categories. Looking ahead, Riyadh is set to add 232,000 sqm of new supply by 2027, bringing the total number of lifestyle retail developments to 33 by that year.

Pagett added: “Since the rapid kick-off of F&B landscape in 2019, Riyadh has been an evident contributor to the evolution of the Kingdom’s lifestyle retail scene. The city now hosts 452,800 sqm of F&B-driven lifestyle retail spaces that incorporate parks, gardens, lively public areas, and a diverse range of lifestyle-focused amenities.

“In both Riyadh and Jeddah, we are witnessing how consumer demands have evolved, with purchases becoming a byproduct of shopping mall visitation habits, and consumers continuing to seek unique immersive experiences, mirroring global trends”.

In Jeddah, the existing lifestyle retail supply stands at 217,700 sqm, with an additional 75,000 sqm introduced in the past two years including U Walk Jeddah (60,000 sqm) and La Paz (13,500 sqm), according to Knight Frank. The average lease rates at SAR 2,030 per square metre, with F&B occupancy at 76%—a testament to the demand for vibrant dining experiences.

Durrani pointed out: “Developments with strong entertainment and lifestyle components continue to command rental premiums as retailers are happy to pay above-average rates to be in locations that offer high levels of footfall”.

Arabic (29%) and European (21%) cuisines lead in popularity in Jeddah.

By 2027, Jeddah is expected to welcome 162,900 sqm of new supply with three new developments, increasing its total number of lifestyle retail developments to 17.

F&B concepts are playing a pivotal role in redefining the Kingdom’s lifestyle retail landscape and remain the primary driver of footfall in these developments, says Knight Frank.

Amar Hussain, Associate Partner – Research, KSA, concluded: “The younger generation in Saudi Arabia is a driving force behind the evolution of lifestyle retail, with their preference for engaging social spaces and experiential offerings reshaping the sector.

“Their demand for unique dining experiences, entertainment hubs, and integrated lifestyle destinations is setting new standards for the retail landscape across the Kingdom in response to a rapidly growing e-commerce sector”.