Saudi malls worth a look for investors

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% 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 metres, compared with 2.1 million square metres 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 metres per person, compared with 0.5 square metres in Riyadh.

"By regional standards, the overall provision of Gross Leasable Area per capita in Riyadh provides more scope for development," Colliers said.

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