Riyadh outperformed Jeddah across all retail categories in the second quarter of 2025, supported by stronger fundamentals, higher consumer spending power and greater investment focus.
According to JLL’s latest KSA Retail Market Dynamics report, super-regional malls in Riyadh maintained high occupancy, with vacancy rates at 2.5 percent in the quarter. Regional and community malls recorded higher vacancies at 11.2 percent and 13.4 percent respectively, though well-located community centres achieved rates below 5 percent.
In Jeddah, super-regional malls posted an 8.3 percent vacancy rate, while regional and community malls faced higher levels of 23.5 percent and 20.9 percent.
Community centres were the strongest performers in rental growth across both cities. In Riyadh, rents rose 6.2 percent year-on-year to SAR 2,149 per sqm per annum. Super-regional and regional malls recorded growth of 1.1 percent and 2.8 percent respectively. In Jeddah, community malls posted a 4.2 percent increase, while regional malls rose 1.2 percent and super-regional mall rents fell 3.7 percent.
“Saudi Arabia’s retail market is evolving and is poised for significant transformation under the future-focused Vision 2030 agenda,” said Saud Al Sulaimani, Country Head, KSA at JLL. “The growing influence of tourism spending and diversifying consumer demographics, coupled with a substantial retail supply pipeline, is reshaping market dynamics, especially in the capital, Riyadh.”
Landlords are increasingly deploying incentives such as flexible lease terms, rent-free periods and CAPEX contributions to secure tenants. Fashion retailers demonstrated stability and growth in the quarter, while F&B operators, particularly local coffee shops, faced operational challenges. Entertainment venues, including cinemas, confronted oversupply concerns, the report said.
Riyadh added 114,100 sqm of retail gross leasable area (GLA) in the first half of 2025, bringing its total stock to 4.35 million sqm, with 195,430 sqm scheduled for completion by year-end. Jeddah recorded 223,240 sqm of new supply in the first six months, lifting its total to 2.58 million sqm, with a further 92,380 sqm expected in the second half.
