DUBAI, 18 October 2007 — Investing in shopping malls in the Saudi capital, Riyadh, will probably remain profitable for some time as demand among shoppers grows, Boston-based property consultancy Colliers International said in a report.
Rents in high-end malls have grown as much as 20 percent since 2005, Colliers said in the report on the Riyadh property market.
Development of shopping malls, and residential and office buildings with retail space on the ground floor, has accelerated, Colliers said.
“This trend is likely to be even more marked in the future due the position of shopping as a primary leisure activity in the Kingdom,” Colliers said. “Strong potential remains for further profitable investment in retail mall assets.” By the end this year, the gross leasable area in Riyadh will probably rise to 2.5 million square meters, compared with 2.1 million square meters in Jeddah and 1.7 million in Dubai, Colliers said.
Still, even by 2010, Riyadh will be sixth amongst Gulf Arab cities in retail space per person. Dubai will be first at more than 2 square meters per person, compared with 0.5 square meters in Riyadh.
“By regional standards, the overall provision of gross leasable area per capita in Riyadh provides more scope for development,” Colliers said.
Meanwhile, Abu Dhabi-based private equity firm Gulf Capital said in a report on Tuesday that Gulf Arab initial public offerings fell 4 percent in the first nine months to $5.9 billion as investor demand declined, especially in Qatar, Kuwait and Bahrain.
However, companies in Saudi Arabia raised the most — $3.69 billion versus $2.35 billion in the year-earlier period.
