Retail

Despite the global fall in oil prices, Saudi Arabia’s retail sector continues to enjoy robust growth, fanned by its solid base of domestic consumers and strengthened by a growing youth population and rising disposable incomes. The strong performance of retailers across a number of sectors is leading to increased demand for dedicated mall space, which is expected to command a premium in the short term. Indeed, the existing rental environment presents a challenge for many retailers in the Kingdom, with rent in some cases reaching up to 25% of tenants’ sales revenue, although in the fast food segment it is a more manageable 15%. However, the overall mood in the industry is one of optimism, buoyed by the presence of strong fundamental conditions for growth.

This chapter contains an interview with Khalid Al Sehaibany, General Manager, Hamat Property Group.