The Investor's Map to Riyadh Retail Properties

Overview of the Riyadh Retail Market

Market Dynamics

Riyadh's retail real estate market is a vibrant and evolving landscape, offering a plethora of opportunities for savvy investors. Based on the comprehensive benchmarking report, here are some key dynamics shaping this market:

• Diversity in Property Sizes: The market showcases a wide range of property sizes, from large-scale malls like Granada Center Mall with a Gross Leasable Area (GLA) of approximately 100,000 m², to smaller retail hubs like Boulevard Mall, boasting a GLA of around 8,000 m². This diversity caters to a broad spectrum of consumer needs and preferences.
• Geographical Spread: Retail properties in Riyadh are not concentrated in a single area but are spread across the city. This distribution allows for a varied investment approach, targeting different demographics and socio-economic segments.
• Growth Prospects: The retail sector in Riyadh is growing, driven by factors such as increasing population, urbanization, and a shift in consumer spending habits. This growth trajectory suggests a promising future for retail investments in the region.
• Quality and Standards: The selected properties for the study are noted for their high standards and quality tenants. This aspect is crucial as it influences foot traffic, tenant retention, and overall property value.

Catchment Areas 

Catchment areas are a critical aspect of retail real estate, particularly for malls, as they directly influence the potential success of these properties. In Riyadh's retail landscape, understanding these areas is essential for investors.

Here's what the report reveals about catchment areas:

• Definition and Importance: A catchment area is the geographic area from which a shopping mall or retail center draws its customers. It's significant because it affects foot traffic, sales potential, and ultimately, the profitability of the retail property.
• Granada Center Mall: This mall stands out with its catchment area covering a remarkable 40.5% of Riyadh’s population. This high percentage indicates its significant impact and reach within the city.
• Al Nakheel Mall: With a catchment area that encompasses 35% of the city's population, Al Nakheel Mall is another key player in Riyadh’s retail landscape. Its substantial coverage demonstrates its importance as a retail destination.
• Riyadh Park Mall: This mall has a catchment that includes 32.1% of Riyadh’s population, marking it as a major attraction in the city’s retail sector.
• Captive Population: Looking deeper into the numbers, Granada Center Mall has the highest share of a captive population, amounting to 23.8% of Riyadh’s total population. This indicates a strong loyal customer base that predominantly frequents this mall over others.

    Quotation from the Report:

• "The Granada Center Mall covers 40.5% of the population."
• "Al Nakheel Mall covers 35% of the population followed by Riyadh Park Mall with 32.1% coverage."
• "The Granada Center Mall has the highest share of captive population of Riyadh City with 23.8%."

Lease Rates and Occupancy Trends

In the Riyadh retail real estate market, understanding lease rates and occupancy trends is crucial for making informed investment decisions. 

• Granada Center Mall: As of August 2022, this mall, being one of the largest in Riyadh, shows an occupancy rate of 64%. It's important to note that some parts of the mall were under renovation at the time, which might have affected this figure.
• Riyadh Park Mall: This mall, currently the largest in terms of Gross Leasable Area, has an impressive occupancy rate of 91.2%, indicating high tenant retention and consistent consumer traffic.
• Riyadh Gallery Mall: With an occupancy rate of 93.3%, this mall stands as another key player in the market, reflecting a strong and stable tenant base.
• Al Nakheel Mall: This property, integral to the Arabian Center Group, reported an occupancy rate of 82.0%, showcasing its robust standing in the market.
• Lease Rates: While specific figures for lease rates per m² per year aren't provided for each mall, the report indicates that all the malls included follow a similar pricing structure. This uniformity suggests a market standard, which can be a critical factor for investors when assessing the potential return on investment.

Quotation from the Report:

• "Occupancy (Aug 2022): 91.2%" [Riyadh Park Mall]
• "Currently the second largest mall in Riyadh as per the Gross Leasable Area." [Granada Center Mall]
• "Another large mall in Riyadh. The occupancy is very good at 93.3%." [Riyadh Gallery Mall]
• "A key property for the Arabian Center Group (Al Hukair Group)." [Al Nakheel Mall]

Investment Opportunities: Case Studies

Case Study 1: Riyadh Park Mall

Riyadh Park Mall stands as a shining example of a successful retail investment in Riyadh's bustling market. Here's an in-depth look at its attributes, making it a noteworthy case study:

• Location and Area: Situated on Alamir Mohamed Ibn Saad Ibn Abdelaziz Road, Al Aqeek, Al Shimal, Riyadh Park Mall is strategically located. It boasts a land area of 139,118m², offering ample space for a diverse range of retail and entertainment options.
• Size and Structure: The mall encompasses a total built-up area of 241,220 m² and a Gross Leasable Area (GLA) of 105,290 m². This substantial size is distributed across three floors, providing a vast array of leasing options.
• Leasable Area Distribution: The leasable area is divided as follows:

• First Floor: 38,499 m²
• Ground Floor: 63,687 m²
• Basement: 3,103 m²

• This distribution allows for a varied mix of retail, dining, and entertainment outlets.

• Tenant Mix and Anchors: Riyadh Park Mall accommodates a significant number of anchor stores, further enhancing its appeal. The diversity in its tenant mix caters to a broad spectrum of consumer preferences.
• Occupancy Rates: As of August 2022, the mall had a high occupancy rate of 91.2%. This is indicative of its popularity among retailers and consumers alike, suggesting a steady stream of foot traffic and consistent revenue generation.
• Investment Appeal: Given its strategic location, sizable GLA, diverse tenant mix, and high occupancy rate, Riyadh Park Mall represents a robust investment opportunity. Its success factors serve as a guide for what investors should look for in potential retail property investments in Riyadh.

Quotation from the Report:

• "Address: Parcel No 418, Riyadh Park Mall, Alamir Mohamed Ibn Saad Ibn Abdelaziz Road, Al Aqeek, Al Shimal"
• "Land Area: 139,118m2"
• "Total Built-up Area: 241,220 m2"
• "Gross Leasable Area: 105,290 m2"
• "Occupancy (Aug 2022): 91.2%"

Case Study 2: Granada Center Mall

Granada Center Mall, a prominent retail destination in Riyadh, offers valuable insights into the city's retail real estate market. Let's explore why it stands as a significant case study for potential investors:

• Prime Location: The mall is located in Dammam, Ash Shohda, Ar Rawdah, strategically positioned to attract a wide customer base.
• Extensive Area: Covering a land area of 421,330 m², Granada Center Mall is one of the largest in Riyadh. It has a total built-up area of 318,064 m² and a Gross Leasable Area (GLA) of 102,080 m².
• Leasable Area and Structure: The mall's extensive leasable area is thoughtfully distributed over two floors, enhancing the shopping experience. The floor-wise distribution is as follows:

• First Floor: 60,027 m²
• Ground Floor: 42,052 m²

• Tenant Diversity: The mall hosts a variety of tenants, including local and international brands, which caters to a broad demographic, increasing its appeal as a retail destination.
• Occupancy Rate: Despite being partially under renovation, the mall maintained a 64% occupancy rate as of August 2022. This figure is likely to improve post-renovation, making it an attractive prospect for future growth.
• Investment Potential: Granada Center Mall's size, location, and tenant mix position it as a strong contender in Riyadh's retail market. Its large GLA and renovation plans signal potential for value appreciation, making it an appealing option for investors.

Quotation from the Report:

• "Address: Granada Center Mall, Dammam, Ash Shohda, Ar Rawdah"
• "Land Area: 421,330 m²"
• "Total Built-up Area: 318,064 m²"
• "Gross Leasable Area: 102,080 m²"
• "Occupancy (Aug 2022): 64% (some parts of the mall under renovation)"

Case Study 3: Al Nakheel Mall

Al Nakheel Mall, a key retail property in Riyadh, presents itself as an intriguing case study for investors. Here’s a detailed exploration of its features:

• Strategic Location: Located on Othman Bin Affan Road, Abi Sofian Ibn Harb, Mugharazat, Al Olaya, this mall benefits from its position in a populous and affluent area of Riyadh.
• Substantial Size and Offering: The mall covers a land area of 238,769 m² with a total built-up area of 299,448 m² and a Gross Leasable Area (GLA) of 81,322 m². This extensive size facilitates a diverse range of retail and leisure offerings.
• Leasable Area Distribution Across Floors:

• Second Floor: 20,767 m²
• First Floor: 58,463 m²

Ground Floor: 2,091 m²

• This distribution caters to different retail and leisure experiences, appealing to a wide consumer base.

• Tenant Diversity: Al Nakheel Mall’s tenant mix includes a range of local and international brands, attracting a diverse group of shoppers and ensuring steady footfall.
• Occupancy and Investment Potential: As of August 2022, the mall reported an occupancy rate of 82.0%. This relatively high occupancy rate, combined with its size and location, marks Al Nakheel Mall as a promising investment opportunity in the Riyadh retail market.
• Additional Considerations: The mall is part of the Arabian Center Group, adding to its credibility and appeal. Its large GLA and diverse tenant mix position it well within the competitive landscape of Riyadh's retail properties.

Quotation from the Report:

• "Address: Parcel No 2, Al Nakheel Mall, Othman Bin Affan Road, Abi Sofian Ibn Harb, Mugharazat, Al Olaya, Riyadh"
• "Land Area: 238,769 m²"
• "Total Built-up Area: 299,448 m²"
• "Gross Leasable Area: 81,322 m²"
• "Occupancy (Aug 2022): 82.0%"

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