Lifestyle retail space to top 1.3m sqm as changing consumer habits drive wave of development across Riyadh and Jeddah

• Lifestyle retail space in Riyadh forecast to grow from 484,900 sqm to 871,200 sqm by 2027
• Seven new developments in Jeddah will increase city’s total supply to 439,000 sqm
• High occupancy is supporting strong lease rates across both cities

Riyadh | 1 September 2025: The amount of lifestyle retail space in Riyadh and Jeddah is set to increase by almost 600,000 sqm to 1.31 million sqm by 2027 as evolving consumer habits and Saudi Arabia’s emergence as a retail destination fuel soaring demand, according to the latest data from global property consultancy Knight Frank.

Regular malls have become universal across Saudi Arabia, with shopping centres scattered throughout urban and suburban areas. However, the sheer volume of available malls has made it increasingly difficult for these spaces to create lasting customer loyalty. Today’s shoppers are becoming more selective, expecting something beyond just retail and seeking out more engaging experiences.

Faisal Durrani, Partner – Head of Research, MENA, said: “In response to this shifting consumer behaviour, lifestyle retail destinations have emerged as a much more popular choice. These locations offer a combination of exciting retail, placemaking and immersive experiences that attract visitors not only for shopping but for socialising, entertainment and events. With the integration of dining, outdoor spaces, art installations and interactive exhibits and events, lifestyle destinations have become more than just malls – they are vibrant community hubs.”

RIYADH LEADS THE WAY

Riyadh’s lifestyle retail market currently encompasses 484,900 sqm of space across 27 developments, with 47,500 sqm added in the past year. By 2027, total supply is expected to reach 871,200 sqm, driven by 12 upcoming projects, increasing the total number of lifestyle retail developments in the city to 39.

Among the new space coming to market this year, 89,230 sqm will be added with the completion of the Al Hamra development, which will offer a rich mix of high-end retail, dining and entertainment in a pedestrian-friendly environment. In 2026 the reimagining of the city’s iconic Euromarche as Riyamarche will provide a further 21,840 sqm, while in 2027 The Bellvue (90,000 sqm) – Riyadh’s largest master planned mixed-use project – promises a mix of shopping, dining, civic and cultural experiences.

The lifestyle retail market demonstrates robust fundamentals, with an overall occupancy of 97% and F&B units averaging 76% occupancy. Average lease rates stand at SAR 2,400 per sqm, underscoring strong demand for quality lifestyle retail space.

Jonathan Pagett, Partner – Head of Retail Advisory, MENA, added: “The lifestyle retail scene in Saudi Arabia continues to expand, boosted by overall consumer spending, which has increased by 7% year-on-year to SAR 1.4 trillion. Riyadh is at the forefront of this retail resurgence, with all of the city’s flagship lifestyle developments at 100% occupancy or very close to it.

With the Kingdom actively working to attract leading global brands and entice the collective spending power of both tourists and Saudi residents, we expect this robust growth to continue. However, competition is fierce across the Kingdom, with a strong pipeline of projects in Riyadh, Jeddah and Al Khobar. Creating unique retail offers with new-to-market concepts is critical to maintain strong performance and high retail sales densities.”

DESIGNER CAFÉS

The opening of the Dior Café pop-up in Riyadh (Saudi National Museum, until April 2025) and Ralph's Coffee (KAFD, June 2025) mark a significant milestone in Saudi Arabia's luxury retail and F&B sector, showcasing a growing trend that could pave the way for more designer cafés and lifestyle experiences within the Kingdom. These collaborations also underline the country’s strategic role in the global luxury market.

Konstantinos Papadakis, Associate Partner – F&B Consultancy, MENA, commented: “The arrival of luxury branded cafes is in line with the government’s Vision 2030 initiative, which focuses on economic diversification and transforming the Kingdom into a tourism hub. With the luxury retail and hospitality sectors flourishing, the Kingdom is fast becoming a key location for global brands seeking to establish a footprint in the Middle East. The combination of iconic retail outlets, high-end dining, and experiential venues puts Saudi Arabia firmly on the map as a leader in lifestyle retail.”

JEDDAH’S RISING MARKET

The past year saw the addition of 24,100 sqm to Jeddah’s lifestyle retail market, according to Knight Frank, increasing the total completed space to 233,400 sqm across 17 developments.

Amar Hussain, Associate Partner – Research, MENA, said, “With its enviable position on the Red Sea, Jeddah is a rising luxury and leisure hub that is ideally positioned to meet growing demand for lifestyle destinations and to attract international visitors. The city’s lifestyle retail sector enjoys a strong average lease rate of SAR 2,200 per sqm and overall occupancy stands at 81%, with F&B units averaging 75% occupancy.”

Around 70,000 sqm is due to be added with the completion of one of the city’s most anticipated new lifestyle retail projects at Jeddah Cove Waterfront by 2027. Part of a wider 127,000 sqm lifestyle destination, the development will feature an array of dining options alongside more than 200 shops, a cinema and a marina with views of the Formula 1 circuit.

This year, 37,200 sqm will be delivered by the Delta mixed-use project at the southwest corner of King Abdulaziz Road and Al Salam Street. The offering will include a range of outlets serving the development’s premium hotel, serviced apartments and office tower.

Looking ahead, a further 205,600 sqm is expected to be delivered by seven new developments, bringing the total lifestyle retail supply in Jeddah to 439,000 sqm by 2027.

Papadakis concluded: “The overall retail landscape in Jeddah is experiencing significant growth, with new malls and lifestyle retail spaces emerging alongside the expansion of existing shopping destinations. Mirroring global trends, Jeddah’s consumers are demanding environments that offer experiential retail, integrating shopping with entertainment and dining. This shift is driving the development of lifestyle retail centres focused on offering leisure opportunities, predominantly through new and unique F&B concepts.”