According to new research from global real estate consultant Knight Frank, Riyadh’s food and beverage scene is thriving with 288,000 sqm of restaurant-led lifestyle retail developments, including 273 new restaurants spread across 16 retail developments, coming to market since the National Transformation Plan was announced in 2016.
Mr. Faisal Durrani, Partner – Head of Middle East Research at Knight Frank has stated the government’s aim for Riyadh to become a new cosmopolitan commercial hub for the region is bringing the city’s public realm and lifestyle facilities into sharper focus. These key ingredients that define a city’s habitability are slowly starting to fall into place in Riyadh.
“The Kingdom’s capital is beginning to morph into a foodie’s treasure trove and we’re not done yet. Bujairi Terrace at Diriyah Gate will add a further 15,000 sqm of lifestyle retail space to the capital when its 17 restaurants open their doors in 2022,” Mr. Durrani added.
Knight Frank’s analysis revealed that the growing Food and Beverage (F&B) scene is being transformed by home-grown local restaurants and cafes.
Faisal Durrani Partner – Head Middle East Research Knight Frank
“International restaurant brands are yet to arrive in a meaningful way, which is a double-edged sword. 68 percent of the city’s new restaurants and cafes are Saudi brands, 21 percent of which specialize in international cuisine. American food outlets account for 16 percent of F&B outlets, while Lebanese restaurants are the third most prevalent at 13 percent. Once news of the soaring demand for high-quality restaurants catches the attention of global brands, consumers will benefit from additional options, but international F&B outlets will undoubtedly rival the local outlets in terms of cost, reputation, and experience. This rapid growth is not without its challenges. Some lifestyle retail developments launched in 2016 or 2017 are already being usurped by newer, more modern lifestyle retail destinations, creating challenges for restauranteurs and landlords alike as vacancy rates in older developments creep up and footfall declines.”
As per Knight Frank, brands such as Magnolia Bakery from the UAE and Urth Caffe from the US have helped place these two countries as the second and third largest sources of restaurant chains in Riyadh, respectively.
“It is very evident that the International F&B brand’s not yet operating in the Kingdom need to understand the growing market dynamics that are allowing the local outlets to flourish and expand not just locally, but regionally and globally as well,” commented Mr. Pedro Ribeiro, Partner – Head of Retail Advisory KSA at Knight Frank.
