‘Retailtainment’ shaping growth of shopping malls in Saudi Arabia

‘Retailtainment’ shaping growth of shopping malls in Saudi Arabia
The rising number of shopping malls in the Kingdom is expected to boost retail spending as they provide consumers with convenience and a wide variety of product choices. (AFP)
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Updated 07 June 2025
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‘Retailtainment’ shaping growth of shopping malls in Saudi Arabia

‘Retailtainment’ shaping growth of shopping malls in Saudi Arabia
  • Shopping centers thrive as they evolve into social venues rather than mere shopping destinations

RIYADH: Shopping malls in Saudi Arabia have strong growth prospects, as consumers increasingly prefer the convenience of retail and entertainment offerings combined under one roof, experts have told Arab News.

Strengthening the Kingdom’s retail sector, including the development of shopping destinations, is one of the crucial goals outlined in the Vision 2030 program, as Saudi Arabia aims to become a global hub of business and tourism by the end of the decade.

In June, a report by global real estate consultancy Knight Frank revealed that Riyadh is leading the Kingdom’s retail transformation, with mall rents up 4 percent in a year and 2.2 million sq. meters of new retail space planned by 2030.

According to the analysis, average mall rent in the Saudi capital rose to SR2,848 ($765) per sq. meter by the end of March, with occupancy rates up 5 percent to reach 92 percent in the first quarter of 2025. 

Speaking to Arab News, Olivier de Cointet, senior adviser at management consulting firm Arthur D. Little, said that shopping malls are set to thrive in the Kingdom as they evolve into social venues rather than mere shopping destinations.

“With retailtainment, which is the fusion of retail and entertainment, becoming an essential part of the customer experience, malls play a significant role in supporting the Kingdom’s vision to become a business and tourist destination hub,” said Cointet.

He added: “These destinations enhance Saudi Arabia’s appeal as a business and tourism hotspot and keep more consumer spending within the Kingdom.”

Anthony Spary, head of retail, leasing, and offices at CBRE for the Middle East and North Africa region, echoed similar views, saying that shopping malls in the Kingdom could serve as social hubs for both locals and visitors, promoting cultural exchange and providing a platform for both international and homegrown brands. 

Today’s consumer expects seamless integration between all channels, and this benefits physical as well as digital retail in terms of driving footfall, experience, and convenience.

Sundeep Khanna, partner at ADL

“Malls often feature concepts such as family entertainment centers, cinemas, cultural events as well as unique anchor attractions, all of which will draw tourists and encourage repeat footfall with residents,” said Spary.

Joe Abi Akl, partner and head of Oliver Wyman’s Retail and Consumer practice for India, the Middle East and Africa, said that shopping malls in Saudi Arabia have allocated nearly half of their gross leased area to non-retail activities, which could help them serve as social and entertainment destinations.

“Shopping malls, with a pipeline exceeding 6 million sq. meters of GLA, play a vital role in this vision by offering integrated, experience-led environments. With more than 40 percent of mall space planned for non-retail activities, they’re not just commercial centers, but social and cultural anchors that enrich the Kingdom’s appeal as a leisure and lifestyle destination,” said Abi Akl.

These comments align with Saudi Arabia’s efforts to become a global hub for tourism and business by the end of the decade, with the Real Estate General Authority projecting the property market to reach $101.62 billion by 2029, representing a compound annual growth rate of 8 percent from 2024. 

Shaping retail spending

CBRE’s Spary said the rising number of shopping malls in the Kingdom is expected to boost retail spending as they provide consumers with convenience and a wide variety of product choices.

“Saudi Arabia offers a unique retail landscape in the region, providing a blend of strip malls, line retail, as well as community and regional shopping districts. This new wave of shopping malls will only add to this offering and create a more varied mix for the consumer,” added Spary.

These views regarding consumer spending align with the findings of a recent report published by global consulting firm AlixPartners, which said the Kingdom’s consumer market is evolving rapidly, characterized by adaptability, shifting spending patterns, and resilience in the face of global economic challenges.

AlixPartners noted that the groceries and clothing categories are expected to remain key spending sectors in 2025, with consumers prioritizing value-driven deals and savings.

Craig Watson, head of retail at JLL in the Kingdom, stated that the development of several high-quality retail centers will transform the consumer experience across Saudi Arabia, offering a wide array of choices and ultimately boosting overall spending.

“When regions go through extensive and rapid growth, the consumer is always the winner, with increased supply providing new and exciting concepts to experience. The retail mix, success, and execution of these places will ultimately determine the share of wallet and who benefits most,” said Watson.

In February, during the Retail Leaders Circle, Abdellah Iftahy, senior partner at McKinsey and Co., said that the Kingdom’s retail sector is undergoing a significant transformation, driven by a digitally savvy young population and increasing consumer confidence. 

He added that by 2035, 75 percent of retail spending is expected to come from the Saudi youth.

E-commerce vs. shopping malls 

Although the growth of e-commerce in Saudi Arabia may pose challenges for traditional retail formats, it can also complement the development of malls in the Kingdom, according to experts.

Watson notes that the Kingdom has emerged as a major e-commerce hub in the Middle East and North Africa, driven by its young, tech-savvy population and expanding internet coverage.

He believes the growth of the e-commerce sector will not negatively impact the operations of shopping malls nationwide. 

FASTFACTS

• Strengthening the Kingdom’s retail sector, including the development of shopping destinations, is one of the crucial goals outlined in the Vision 2030 program.

• Riyadh is leading the Kingdom’s retail transformation, with mall rents up 4 percent in a year and 2.2 million sq. meters of new retail space planned by 2030.

“As is the case with every region, the overwhelming majority of retail sales is derived from brick-and-mortar transactions. Malls will need to adapt by integrating technology, enhancing the customer experience and offering unique in-person experiences that cannot be replicated online,” said Watson.

According to Spary, many consumers still prefer the tactile experience of shopping in person, and malls can integrate e-commerce by offering click-and-collect services.

“Malls can serve as experiential spaces where brands showcase their products, attracting customers who enjoy the physical shopping experience. Taking into account both cultural shopping preferences as well as the impact of the climate on consumer behavior, increasing e-commerce penetration will add to the overall omnichannel approach that retailers are adopting across the region,” said Spary.

Sundeep Khanna, partner at ADL, said that the growth of the e-commerce sector is not cannibalising shopping malls, but is actually complementing them.

“Today’s consumer expects seamless integration between all channels, and this benefits physical as well as digital retail in terms of driving footfall, experience, and convenience,” said Khanna.

Attracting international brands 

Spary told Arab News that the transformation and upgrade of retail offerings in the market of Saudi Arabia will pave the way for new international brands to enter and grow within the Kingdom, contributing to the country’s wider economic goals.

According to the CBRE official, the entry of new brands will not only enhance consumer choices but also stimulate a competitive environment that encourages brand expansion and attracts investment.

“CBRE is currently seeing record levels of demand from international brands looking to expand into the region. This demand is likely to continue given the robust and ever-maturing nature of this market,” said Spary.

Cointet noted that Saudi Arabia has become an attractive destination for global fashion, luxury, and food and beverage retailers, drawn by the population’s strong spending power and the rise of premium mall spaces such as Riyadh Park and Mall of Arabia.

“Mall expansion goes hand-in-hand with pro-investment reforms — for example, Saudi Arabia now allows 100 percent foreign ownership in the retail sector, encouraging international companies and developers to invest directly,” added Cointet.

The Arthur D. Little official further stated that the expansion of shopping malls in the Kingdom will also provide local brands with unprecedented opportunities to establish a national and international footprint.

“This is critical for developing the Saudi economy and I anticipate we will see more Saudi-owned brands enter the world stage in the coming years,” added Cointet.

Potential challenges

The experts also highlighted some of the challenges in Saudi Arabia’s retail landscape, particularly surrounding shopping malls, including oversupply.

“Whilst there’s certainly a risk of oversupply with many large projects due to be delivered over the course of the next two to three years, the need for continuous innovation and adaptation to changing consumer trends will be crucial for the sustainability of shopping malls in the Kingdom,” said Spary.

The CBRE official further said that new attractions, entertainment options, and cultural elements will play a pivotal role in reshaping the retail landscape in the market.

Spary added that the integration of these features will create a more engaging and immersive experience for consumers, ultimately redefining how shopping is perceived and enjoyed in the Kingdom.

Cointet expressed a slightly different view, stating that the demand for malls in Saudi Arabia is expected to rise in the coming years due to population growth.

He explained that this challenge could be addressed by developing large-format mega malls that serve as destinations in themselves, alongside smaller community malls designed to offer convenience at the local level.

In April, a separate analysis by S&P Global said that oversupply, changing retail preferences, and pressure on rental yields amid elevated capital expenditure by landlords could exert pressure on the Kingdom’s retail sector.

According to the US-based agency, the volume of retail projects in the pipeline raises the risk of potential oversupply, particularly in secondary locations where demand may not be sufficient to absorb new retail spaces. 

Discussing the risk of oversupply, Cointet said: “Saudi Arabia’s aggressive development pipeline of new retail space underway — raises the risk of too much supply coming to market, which could pressure occupancies and rents in some areas, or even threaten the launch of some of the programs.”

He added: “Landlords and developers may need to differentiate their properties with unique experiences, dining, and entertainment offerings  — and even offer lease incentives — to avoid saturation and keep shoppers engaged in an evolving retail landscape.”


Oil Updates — Brent futures down nearly $2 after US delays decision on direct Iran involvement

Oil Updates — Brent futures down nearly $2 after US delays decision on direct Iran involvement
Updated 20 June 2025
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Oil Updates — Brent futures down nearly $2 after US delays decision on direct Iran involvement

Oil Updates — Brent futures down nearly $2 after US delays decision on direct Iran involvement

SINGAPORE: Brent crude prices pared gains from the previous session and fell nearly $2 on Friday after the White House delayed a decision on US involvement in the Israel-Iran conflict, but they were still poised for a third straight week in the black.

Brent crude futures fell $1.89, or 2.4 percent, to $76.96 a barrel by 5:55 a.m. Saudi time. On a weekly basis, it was up 3.8 percent.

The US West Texas Intermediate crude for July — which did not settle on Thursday as it was a US holiday and expires on Friday — was up 53 cents, or 0.7 percent, to $75.67.

The more liquid WTI for August rose 0.2 percent, or 17 cents to $73.67.

Prices jumped almost 3 percent on Thursday as Israel bombed nuclear targets in Iran, and Iran fired missiles and drones at Israel after hitting an Israeli hospital overnight. The week-old war between Israel and Iran showed no signs of either side backing down.

Brent futures trimmed previous session gains following the White House’s comments that President Donald Trump will decide whether the US will get involved in the Israel-Iran conflict in the next two weeks.

“Oil prices surged amid fears of increased US involvement in Israel’s conflict with Iran. However, the White House press secretary later suggested there was still time for de-escalation,” said Phil Flynn, analyst at the Price Futures Group.

Iran is the third-largest producer among members of the Organization of the Petroleum Exporting Countries, extracting about 3.3 million barrels per day of crude oil.

About 18 million to 21 million bpd of oil and oil products move through the Strait of Hormuz along Iran’s southern coast, and there is widespread concern the fighting could disrupt trade flows in a blow to supplies.

“The ‘two-week deadline’ is a tactic Trump has used in other key decisions. Often these deadlines expire without concrete action, ... which would see the crude oil price remain elevated and potentially build on recent gains,” said Tony Sycamore, analyst at IG. 


OPEC+ has proven to be oil markets’ central bank, says Saudi energy minister

OPEC+ has proven to be oil markets’ central bank, says Saudi energy minister
Updated 19 June 2025
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OPEC+ has proven to be oil markets’ central bank, says Saudi energy minister

OPEC+ has proven to be oil markets’ central bank, says Saudi energy minister

RIYADH: OPEC+ has proven to be the “central bank” and regulator of the global oil market, providing much-needed stability, Saudi Arabia’s energy minister said.

Speaking at the annual St. Petersburg International Economic Forum in Russia, Prince Abdulaziz bin Salman praised the alliance’s role in balancing oil markets amid global economic uncertainties.

“I would have to say that OPEC+ had proven to be an instrument that if it wasn’t invented by us and Russia and our colleagues, it should have been invented a long time ago because this is what OPEC+ had achieved in terms of bringing stability to the market and had proven that it is the central bank and the regulator of oil markets,” the energy minister said.

Prince Abdulaziz also highlighted the ongoing partnership between Saudi Arabia and Russia through the Saudi-Russian Joint Committee, noting plans for Russian Deputy Prime Minister Alexander Novak to visit the Kingdom later this year with a high-level business delegation.

“I’m looking forward to host Alexander — the co-chair of our joint committee — to Saudi Arabia this year, with the biggest, most sizable business community participation,” he said.

Prince Abdulaziz emphasized that the collaboration seeks to deepen bilateral economic ties and foster diversified investment opportunities.

“We have a lot to showcase that bonding together. It will allow us to have a much more diversified relationship, and we are, as a government, working together to provide the right environment for those who want to invest in Saudi Arabia or in Russia or in any type or form of joint venturing that we should facilitate that and ensure that the investment environment is congenial for it to happen,” he added.

The minister described the energy alliance as a flexible mechanism responsive to changing global conditions, reaffirming Saudi Arabia’s commitment to cooperation with partners to maintain market stability.

Acknowledging the challenges facing Russia, Prince Abdulaziz noted the Kingdom’s support amid external restrictions.

“It’s been a challenging time what Russia is going through, but we have shown a great deal of understanding of the situation, and we’re trying to maneuver with the restrictions that are existing today,” he said.

“That has been the discharge of our leadership willingness to accommodate with this current situation and hopefully helping to support Russia in mitigating these exterior most daunting issues.”

On whether Saudi Arabia and Russia would compensate for any loss of Iranian crude supplies, the minister stressed that such scenarios are hypothetical and that OPEC+ decisions are collective.

“You give me a question that is not evidently seen happening, I don’t have an answer for you. Again, we only react to realities. But if anybody gives a question that is not relating to the reality today, I fail to see where we could predict things and how we would relate to it,” he said.

The minister clarified that OPEC+ consists of 22 member states and is not dominated by Saudi Arabia and Russia alone. A core group of eight countries is tasked with engaging the full membership to ensure coordinated responses to market changes.

“To respond to a hypothetical question by giving a hypothetical answer, which none of us two here have the right to speak on behalf of everybody without knowing their opinion, is too much of an ask,” he added.

He concluded by highlighting OPEC+’s reputation as a reliable and adaptive organization.

“What we know and what Alexander was saying just a while ago is that we have, as OPEC even before, an OPEC+ attending to so many circumstances since its first, it was in sequence, even inception, that we have been a reliable organization, a serious organization, an effective organization, and attentive to circumstances when they prevail,” he said.


Closing Bell: Saudi main index rises to close at 10,610 

Closing Bell: Saudi main index rises to close at 10,610 
Updated 19 June 2025
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Closing Bell: Saudi main index rises to close at 10,610 

Closing Bell: Saudi main index rises to close at 10,610 

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Thursday, gaining 19.58 points, or 0.18 percent, to close at 10,610.71.   

The total trading turnover of the benchmark index was SR6.4 billion ($1.7 billion), as 116 of the stocks advanced and 115 retreated.    

The Kingdom’s parallel market Nomu lost 28.01 points, or 0.11 percent, to close at 26,175.83. This came as 35 of the listed stocks advanced while 41 retreated.    

The MSCI Tadawul Index lost 0.54 points, or 0.04 percent, to close at 1,367.14.     

The best-performing stock of the day was Alistithmar AREIC Diversified REIT Fund, whose share price surged 9.97 percent to SR7.50. 

Seera Group Holding also recorded strong gains, with its share price rising 7.99 percent to SR23.80, while Banan Real Estate Co. climbed 7.14 percent to close at SR4.50. 

Southern Province Cement Co. recorded the most significant drop, falling 5.19 percent to SR27.40. Ataa Educational Co. also saw its stock prices fall 3.43 percent to SR59.10. 

Leejam Sports Co. also saw its stock prices decline 3.01 percent to SR116.

On the announcements front, Advance International Communications and Technology said it has completed the conversion of one of its branches into an independent limited liability company under the name Innovation Passage Technology Co.

According to a statement on Tadawul, the move is part of the company’s strategy to restructure its operations by separating the wholesale business sector. The new entity will take over all wholesale functions and operations. The company stated that the transformation is not expected to have a significant financial impact and that any further updates will be announced as they arise. 

Alujain Corp. announced that its board of directors has approved the distribution of SR51.9 million in cash dividends for the second quarter of 2025.

A bourse filing revealed that the number of shares eligible for dividends is 69.2 million, with the dividend per share set at SR0.75. The dividend represents 7.5 percent of the share’s par value. 

Alujain shares closed the session up 2.74 percent at SR35.

United Cooperative Assurance Co. announced the signing of a memorandum of understanding with Arabia Insurance Cooperative Co. to evaluate a potential merger.

According to a Tadawul filing, both parties will conduct technical, financial, tax, legal, and actuarial due diligence, and will enter into non-binding discussions regarding the terms and conditions of the proposed transaction.  

United Cooperative Assurance shares closed at SR6.70, up 0.75 percent. 


Saudi Arabia’s PIF launches company to build and run Expo 2030

Saudi Arabia’s PIF launches company to build and run Expo 2030
Updated 19 June 2025
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Saudi Arabia’s PIF launches company to build and run Expo 2030

Saudi Arabia’s PIF launches company to build and run Expo 2030
  • New firm to turn site into multicultural hub post-event

RIYADH: Saudi Arabia’s Public Investment Fund has launched Expo 2030 Riyadh Co., a wholly owned entity tasked with developing, managing, and operating the infrastructure and programming for the Kingdom’s first World Expo.

During its development phases, the project is projected to contribute $64 billion to Saudi Arabia’s gross domestic product and generate around 171,000 direct and indirect jobs. Once operational, it is expected to add $5.6 billion to the national economy.

According to an official release on Thursday, the newly established company will play a pivotal role not only in executing the large-scale event but also in preserving its long-term legacy.

Known as ERC, the company will fast-track operations to meet its ambitious mandate. It plans to collaborate with both local and international private sector partners to deliver on construction, cultural programming, and event management goals.

“ERC benefits from PIF’s diverse local and global ecosystem and the establishment of the company aligns with PIF’s local real estate strategy, which drives economic transformation and diversification, advancing urban innovation and enhancing quality of life, driven by the ambitious goals of Saudi Vision 2030,” said Saad Al-proud, head of PIF’s Local Real Estate Investment Division.

Covering an expansive 6 million sq. m, the Expo 2030 site will be one of the largest World Expo venues ever built. Strategically located north of Riyadh near the upcoming King Salman International Airport, it will offer direct access to major city landmarks.

Set to run from Oct. 1, 2030 to March 31, 2031, Expo 2030 Riyadh is expected to draw over 40 million visits. Following the event, ERC aims to repurpose the gated expo area into a “global village” — a multicultural destination featuring retail, food  and beverages, and premium residential offerings, all aligned with the Kingdom’s push toward sustainable tourism and innovation.

Participating nations will have the opportunity to construct permanent pavilions, enabling a lasting impact beyond the event itself and encouraging long-term investment and business ties.

PIF emphasized that the initiative reflects its broader strategy to drive economic diversification while securing sustainable financial returns.

The fund remains at the forefront of delivering Saudi Arabia’s transformative giga-projects and real estate ventures, reshaping the national landscape and bolstering the Kingdom’s global positioning.

Riyadh secured the rights to host Expo 2030 in November 2024, winning the international vote in the first round — further solidifying its reputation as a fast-evolving capital that blends connectivity, sustainability, and high quality of life at scale.


Syria completes first global SWIFT transfer since war

Syria completes first global SWIFT transfer since war
Updated 19 June 2025
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Syria completes first global SWIFT transfer since war

Syria completes first global SWIFT transfer since war

DAMASCUS: Syrian Arab Republic has carried out its first international bank transaction via the SWIFT system since the outbreak of its 14-year civil war, its central bank governor said on Thursday, a milestone in the country’s push to reintegrate into the global financial system.

Abdelkader Husriyeh told Reuters in Damascus that a direct commercial transaction had been carried out from a Syrian to an Italian bank on Sunday, and that transactions with US banks could begin within weeks.

“The door is now open to more such transactions,” he said.

Syrian banks were largely cut off from the world during the civil war after a crackdown by Bashar Assad on anti-government protests in 2011 led Western states to impose sanctions, including on Syria’s central bank.

Assad was ousted as president in a lightning offensive by rebels last year and Syria has since taken steps to re-establish international ties, culminating in a May meeting between interim President Ahmed Al-Sharaa and US President Donald Trump in Riyadh.

The US then significantly eased its sanctions and some in Congress are pushing for them to be totally repealed. Europe has announced the end of its economic sanctions regime.

Syria needs to make transfers with Western financial institutions in order to bring in huge sums for reconstruction and to kickstart a war-ravaged economy that has left nine out of 10 people poor, according to the UN.

Husriyeh chaired a high-level virtual meeting on Wednesday bringing together Syrian banks, several US banks and US officials, including Washington's Syria envoy Thomas Barrack.

The aim of the meeting was to accelerate the reconnection of Syria’s banking system to the global financial system and Husriyeh extended a formal invitation to US banks to re-establish correspondent banking ties.

“We have two clear targets: have US banks set up representative offices in Syria and have transactions resume between Syrian and American banks. I think the latter can happen in a matter of weeks,” Husriyeh told Reuters.

Among the banks invited to Wednesday’s conference were JP Morgan, Morgan Stanley and Citibank, though it was not immediately clear who attended.