Saudi Arabia is witnessing an unprecedented transformation in the commercial leisure space sector, led by the cities of Riyadh and Jeddah, which are redefining the commercial landscape through mega projects that enhance shopping and entertainment experiences, in line with the objectives of the Kingdom's Vision 2030.
Saudi Arabia is witnessing an unprecedented transformation in the commercial leisure space sector.
A surge in entertainment and commercial projects
<According to a report by Knight Frank, Riyadh and Jeddah are set to welcome 394.9,000 square meters of new commercial leisure developments by 2027, ranging from food and beverage outlets, entertainment spaces, and vibrant public spaces. This expansion comes in response to the growing demand for modern shopping experiences that go beyond the traditional concept of shopping to an integrated mix of entertainment and social interaction.
Rising rental prices and demand growth
The report reveals that the average rental prices for commercial leisure spaces in Riyadh reached SAR 2,360 per square meter, reflecting the high demand for this sector. Food and beverage outlets lead the way, accounting for 84% of the total commercial space, with casual dining dominating with 52%, followed by cafes with 20%.
In Jeddah, the total commercial space in Riyadh stands at SAR 2360 per square meter, reflecting the high demand for this sector.
<In Jeddah, the total supply of leisure commercial space currently stands at 217.7 thousand square meters, with average rental rates of SAR 2030 per square meter. Food and beverage outlets enjoy high occupancy rates of 76%, reflecting the growing popularity of this category.
Food and beverage outlets enjoy high occupancy rates of 76%, reflecting the growing popularity of this category.
Massive projects are changing the landscape
Riyadh alone is expected to add 232,000 square meters of new commercial leisure space by 2027, bringing the total to 33 projects, while Jeddah will receive an additional 162.9,000 square meters, bringing its number of projects to 17.
Jeddah will receive an additional 162.9,000 square meters, bringing its number of projects to 17.
Boulevard World and Boulevard City in Riyadh are two of the most prominent projects that have integrated retail, entertainment and dining, reinforcing the transformation of malls into integrated lifestyle destinations. Boulevard World and Boulevard City in Riyadh are two of the most prominent projects that have integrated retail, entertainment and dining.
The evolution of the mall concept in the Kingdom
Faisal Durrani, Head of Research at Knight Frank, said that the leisure retail sector in Saudi Arabia has undergone a radical evolution since 2021, with malls transforming from mere shopping venues to interactive environments that offer exceptional experiences. He added that this transformation is in line with the objectives of Vision 2030 to enhance the quality of life through the development of integrated entertainment spaces.
Food & Beverage: Key growth driver
Arabic (29%) and European (21%) cuisines are leading Jeddah's dining options, while restaurant and café projects continue to attract investment within the Kingdom. Knight Frank confirms that new F&B concepts are the key factor in attracting visitors to modern malls.
Entertainment experiences trump traditional shopping
<According to analyst Jonathan Paget, consumers in Saudi Arabia, especially younger generations, no longer view malls as just places to shop, but are looking for immersive experiences that include entertainment, cuisine, and social interaction. These changes are setting new standards for the future of retail, especially with the growth of e-commerce and the trend towards integrated experiences within malls.
Looking ahead
With this boom in leisure and commercial projects, the Saudi market is heading into a new era of innovation in the commercial space sector, with malls becoming the hub of social and recreational life, not just a destination for traditional shopping. With continued expansion and investments, these projects are expected to play a key role in boosting the local economy and attracting more visitors and investors to the Kingdom.
