Saudi Arabia to add 600,000 sqm of lifestyle retail by 2027

Saudi Arabia is set for a major retail transformation as lifestyle retail space in Riyadh and Jeddah expands by 600,000 square metres, reaching a total of 1.31 million square metres by 2027, according to new data from Knight Frank.

The surge reflects shifting consumer preferences and Saudi Arabia’s growing profile as a global retail destination. While traditional malls remain widespread across the Kingdom, their sheer volume has eroded customer loyalty, pushing developers to rethink their strategies: Faisal Durrani, Partner – Head of Research, MENA at Knight Frank 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

Riyadh: A new era of lifestyle retail

Riyadh currently boasts 484,900 sqm of lifestyle retail space across 27 developments, with 47,500 sqm added over the past year. By 2027, supply is expected to nearly double to 871,200 sqm, driven by 12 upcoming projects.

Notable developments include:

• Al Hamra (2024): 89,230 sqm of high-end retail, dining, and entertainment.
• Riyamarche (2026): A 21,840 sqm transformation of the city’s Euromarche.
• The Bellvue (2027): A 90,000 sqm mixed-use hub with shopping, dining, cultural and civic spaces.

Occupancy in Riyadh’s lifestyle retail market stands at 97%, with F&B units averaging 76%. Lease rates average SAR 2,400 per sqm.

Jonathan Pagett, Partner – Head of Retail Advisory, MENA, said all of Riyadh’s flagship lifestyle developments are fully leased or nearly full. “The Kingdom is working to attract leading global brands and entice the spending power of both tourists and residents. Competition is fierce, so unique retail concepts will be key to sustaining growth,” he noted.

Luxury retail is also gaining momentum. Dior Café’s pop-up at the Saudi National Museum and Ralph’s Coffee, opening in 2025 at KAFD, signal a new wave of branded cafés and experiential F&B concepts.

Jeddah: lifestyle meets leisure on the Red Sea

Jeddah added 24,100 sqm of lifestyle retail space in the past year, bringing the total to 233,400 sqm across 17 developments. By 2027, the market is expected to grow to 439,000 sqm with seven new projects.

Key additions include:

• Jeddah Cove Waterfront (2027): 70,000 sqm as part of a 127,000 sqm lifestyle hub featuring shops, dining, cinema, and marina with views of the Formula 1 circuit.
• Delta Project (2024): 37,200 sqm of retail alongside a hotel, serviced apartments, and an office tower.

Jeddah’s lifestyle retail sector reports 81 per cent overall occupancy, with F&B units averaging 75%. Lease rates stand at SAR 2,200 per sqm.

“With its enviable position on the Red Sea, Jeddah is a rising luxury and leisure hub ideally positioned to attract international visitors,” said Amar Hussain, Associate Partner – Research, MENA.

Vision 2030 and beyond

Analysts note that the expansion aligns with Saudi Arabia’s Vision 2030, which aims to diversify the economy and position the Kingdom as a global tourism and retail hub.

“Luxury branded cafés and lifestyle destinations place Saudi Arabia firmly on the map as a leader in lifestyle retail,” added Konstantinos Papadakis, Associate Partner – F&B Consultancy, MENA.

With consumer spending up 7 per cent year-on-year to SAR 1.4 trillion, Saudi Arabia’s retail sector is poised for robust growth. However, experts caution that developers must differentiate their offerings to capture and sustain market share in an increasingly competitive landscape.