Saudi Arabia’s retail sector is still suffering from lower-than-average footfall, leading to a fall in rental prices at shopping mall properties around the country, according to a new report from property consultancy Knight Frank.

The report said lease rates in prime shopping malls across the country dropped by between one and five percent over the last 18 months. During the second quarter alone, retail spaces at popular shopping malls in Riyadh, Jeddah and Dammam Metropolitan Area (DMA) declined by between 1.5 percent and 3 percent

“Hugely reduced footfall as a result of the pandemic and repeated restrictions on international arrivals has been a double whammy for the retail market. That said, the reopening of the border to tourists from 49 nations this week, combined with ‘revenge spending’ from surging domestic tourism, may help cushion the market from further sharp declines,” said Faisal Durrani, partner and head of Middle East research at Knight Frank.

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