RETAIL
SUPPLY SLOWS FOR RETAIL INDUSTRY
Te retail industry is well established in Jeddah and while its supply may have slowed down, demand remains strong. Cityscape magazine examines recent research and emerging trends
in Islam. Jeddah therefore acts as the first port of call for large numbers of pilgrims who arrive annually en-route to the holy cities. Information published by Colliers shows that religious tourism is an important factor for Jeddah. Te market-wide footfall grew by 4% in Q3 2010 compared to the previous year due to an increase in the number of pilgrims that visited the city last year. Tis religious tourism helps to drive the retail industry and as a result the city’s focus is largely said to concentrate on mid-tier brands. Tere are a large number of shopping malls well established such as: Te Mall of Arabia, Red Sea Mall, Al Andalus Mall, Stars Avenue Mall and Serafi Mega Mall. However, the supply flow has started to slow down of late. Jones Lang LaSalle highlights in the MENA Jeddah City Profile Q2 2010 that following a ‘period of high supply over the past two years, the supply tap has been turned off in respect of new shopping centres in Jeddah.’ Last year saw a number of major new completions. Stars Avenue on Malak Road added around 38,000 sq m of stock in the Ana retail strip.
A
s Saudi Arabia’s second largest city, Jeddah is considered an important commercial hub. It is a primary gateway to both Mecca, Islam’s holiest city and Medina, the second holiest place
Te opening of the largest new project, Central Park (on the Old Airport lands) was however delayed due to slow absorption levels. JLLS says while there have been no major new announcements of additional retail malls over the past six months, there remains a steady supply of retail space due for completion over the next two years. Most of this space is coming in showroom formats or beneath high-rise office buildings such as Jameel Square or Kings Road Tower. A few new trends are emerging in Jeddah within the retail market - JLLS
notes a new format with the inclusion of retail space within hotels and other mixed-use developments. It gives an example of the Park Hyatt Hotel, which is ‘leveraging its marina setting to attract up-market F&B operators.’ In Colliers’ MENA Retail Overview Q3 2010, researchers note another
trend on the rise with a number of future projects favouring the “box- type” structure that includes entertainment areas aimed at younger consumers, and retail chains that offer different types of commodities to provide a ‘one-stop’ shopping destination. Colliers states this latest trend has ‘served as a catalyst to the growth of shopping malls in the city featuring hypermarket anchor stores, which mimic established and
12 I CITYSCAPE I JUNE 2011
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