Dubai: Retail rental rates in Riyadh, Saudi Arabia continued to grow in the third quarter of the year, despite major malls in the pipeline, according to a report by real estate consultancy JLL.
In the report, published on Sunday, JLL stated that rental rates were marginally up in super regional and regional shopping malls in the third quarter, but did not increase significantly in community malls since the last quarter. Vacancy dropped slightly by 1 per cent during the period.
In Jeddah meanwhile, lower grade community malls have recorded an 8 per cent drop in retail rental rates compared to the same period in 2013. On the other hand, vacancy rates increased by around five per cent.
“A further 32,000 square metres of retail space is expected to enter the market by the end of 2014 which is likely to see vacancy rates increase whilst the excess supply is absorbed,” stated JLL in its report.
Riyadh has been seeing an increase in rental and sale prices of villas and apartments. Next year, 75,000 housing units are expected to enter the market.
Also, the city’s hotels have been seeing improved occupancy rates as the market absorbs the increase in supply over the last couple of years, but average room rates have been lower.
“The residential sector saw prices and rental increases across all areas due to the continued shortage of housing units...hotel performance remains patchy, with higher occupancy levels but lower room rates than over the same period in 2013,” stated Jameel Ghaznawi, national director and country head of JLL in Saudi Arabia.
