According to a recent report by Jiwar Real Estate Management & Marketing, the supply of mall-based retail gross leasable area (GLA) in the Kingdom is expected to expand at a compound annual growth rate (CAGR) of 11.3 percent and to reach 8.3 million square meters by 2012.

"The outlook for the Kingdom metropolitan mall-based retail market is excellent, given the strong growth demand and increasing occupancy rates. The government's strategic focus on the expanding nonoil economy is likely to lead to the development of additional commercial industries, of which mall retailing will be a major beneficiary," said Saleh Bin Abdullah Al-Habib, CEO of Jiwar.

Personal disposable income in the Kingdom is also expected to grow at a CAGR of 6.5 percent to reach around SR659 billion by 2013. GDP (gross domestic product) per capita is also forecast to increase by CAGR 7.3 percent to SR78,723 by 2014. Both the personal disposable income and GDP per capita are expected to outperform inflation, thus creating a prime opportunity for growth in the retail sector.

Also contributing to the boost to retailing is the increase of credit and debit cards as well as consumer confidence among the young population. As many as 63 percent of citizens are currently under the age of 30, with population growth increasing by 2.49 percent annually, compared to a global average of 1.14 percent.

Shopping malls are also a primary reason for tourism in the Kingdom, which is visited by more than 12 million each year. Jiwar has been involved with developments including residential, cultural and religious tourism in Makkah, highlighting the Kaaba and Haram as well as landmarks surrounding the Holy Mosque. These are part of what makes retailing and building shopping malls such a lucrative business.