Retal's portfolio hits SAR 31B, 50% of projects in Riyadh: CFO
Retal Urban Development Co. 's portfolio is valued at SAR 31 billion, including SAR 13 billion in real estate developments among which is a divestment that was carried out in Q4 2024, in addition to SAR 18 billion in direct development, said CFO Ammar Al-Ghoul.
The company's projects are distributed as follows: 50% in the Riyadh Region, 40% in the Eastern Province, and 10% in the Western Province, he added, in an interview with Al Arabiya TV.
Al-Ghoul also pointed out that about 90% of the company's projects are within fully integrated urban development zones, adding that the company's sales reached SAR 1 billion in Q1 2025, compared to nearly SAR 3 billion in the entire of 2024.
The company does not own undeveloped land, as all land is designated for contracted projects, said the official, highlighting that Retal aims to expand into integrated and mixed-use residential development in the future.
He also stated that more than 800 housing units were delivered in 2024, with over 1,800 units targeted to be handed over in 2025. Meanwhile, around 65% of the total project portfolio has already been sold out, with the remaining portion in progress and pending delivery.
As for interest rates, Al-Ghoul stated that despite high interest rates, the company's debt remains very balanced, with a net debt-to-equity ratio between 1.1-1.28, which is considered a very acceptable average in the sector.
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Arab News
6 hours ago
- Arab News
‘Retailtainment' shaping growth of shopping malls in Saudi Arabia
RIYADH: Shopping malls in Saudi Arabia have strong growth prospects, as consumers increasingly prefer the convenience of retail and entertainment offerings combined under one roof, experts have told Arab News. Strengthening the Kingdom's retail sector, including the development of shopping destinations, is one of the crucial goals outlined in the Vision 2030 program, as Saudi Arabia aims to become a global hub of business and tourism by the end of the decade. In June, a report by global real estate consultancy Knight Frank revealed that Riyadh is leading the Kingdom's retail transformation, with mall rents up 4 percent in a year and 2.2 million sq. meters of new retail space planned by 2030. According to the analysis, average mall rent in the Saudi capital rose to SR2,848 ($765) per sq. meter by the end of March, with occupancy rates up 5 percent to reach 92 percent in the first quarter of 2025. Speaking to Arab News, Olivier de Cointet, senior adviser at management consulting firm Arthur D. Little, said that shopping malls are set to thrive in the Kingdom as they evolve into social venues rather than mere shopping destinations. 'With retailtainment, which is the fusion of retail and entertainment, becoming an essential part of the customer experience, malls play a significant role in supporting the Kingdom's vision to become a business and tourist destination hub,' said Cointet. He added: 'These destinations enhance Saudi Arabia's appeal as a business and tourism hotspot and keep more consumer spending within the Kingdom.' Anthony Spary, head of retail, leasing, and offices at CBRE for the Middle East and North Africa region, echoed similar views, saying that shopping malls in the Kingdom could serve as social hubs for both locals and visitors, promoting cultural exchange and providing a platform for both international and homegrown brands. Today's consumer expects seamless integration between all channels, and this benefits physical as well as digital retail in terms of driving footfall, experience, and convenience. Sundeep Khanna, partner at ADL 'Malls often feature concepts such as family entertainment centers, cinemas, cultural events as well as unique anchor attractions, all of which will draw tourists and encourage repeat footfall with residents,' said Spary. Joe Abi Akl, partner and head of Oliver Wyman's Retail and Consumer practice for India, the Middle East and Africa, said that shopping malls in Saudi Arabia have allocated nearly half of their gross leased area to non-retail activities, which could help them serve as social and entertainment destinations. 'Shopping malls, with a pipeline exceeding 6 million sq. meters of GLA, play a vital role in this vision by offering integrated, experience-led environments. With more than 40 percent of mall space planned for non-retail activities, they're not just commercial centers, but social and cultural anchors that enrich the Kingdom's appeal as a leisure and lifestyle destination,' said Abi Akl. These comments align with Saudi Arabia's efforts to become a global hub for tourism and business by the end of the decade, with the Real Estate General Authority projecting the property market to reach $101.62 billion by 2029, representing a compound annual growth rate of 8 percent from 2024. Shaping retail spending CBRE's Spary said the rising number of shopping malls in the Kingdom is expected to boost retail spending as they provide consumers with convenience and a wide variety of product choices. 'Saudi Arabia offers a unique retail landscape in the region, providing a blend of strip malls, line retail, as well as community and regional shopping districts. This new wave of shopping malls will only add to this offering and create a more varied mix for the consumer,' added Spary. These views regarding consumer spending align with the findings of a recent report published by global consulting firm AlixPartners, which said the Kingdom's consumer market is evolving rapidly, characterized by adaptability, shifting spending patterns, and resilience in the face of global economic challenges. AlixPartners noted that the groceries and clothing categories are expected to remain key spending sectors in 2025, with consumers prioritizing value-driven deals and savings. Craig Watson, head of retail at JLL in the Kingdom, stated that the development of several high-quality retail centers will transform the consumer experience across Saudi Arabia, offering a wide array of choices and ultimately boosting overall spending. 'When regions go through extensive and rapid growth, the consumer is always the winner, with increased supply providing new and exciting concepts to experience. The retail mix, success, and execution of these places will ultimately determine the share of wallet and who benefits most,' said Watson. In February, during the Retail Leaders Circle, Abdellah Iftahy, senior partner at McKinsey and Co., said that the Kingdom's retail sector is undergoing a significant transformation, driven by a digitally savvy young population and increasing consumer confidence. He added that by 2035, 75 percent of retail spending is expected to come from the Saudi youth. E-commerce vs. shopping malls Although the growth of e-commerce in Saudi Arabia may pose challenges for traditional retail formats, it can also complement the development of malls in the Kingdom, according to experts. Watson notes that the Kingdom has emerged as a major e-commerce hub in the Middle East and North Africa, driven by its young, tech-savvy population and expanding internet coverage. He believes the growth of the e-commerce sector will not negatively impact the operations of shopping malls nationwide. • Strengthening the Kingdom's retail sector, including the development of shopping destinations, is one of the crucial goals outlined in the Vision 2030 program. • Riyadh is leading the Kingdom's retail transformation, with mall rents up 4 percent in a year and 2.2 million sq. meters of new retail space planned by 2030. 'As is the case with every region, the overwhelming majority of retail sales is derived from brick-and-mortar transactions. Malls will need to adapt by integrating technology, enhancing the customer experience and offering unique in-person experiences that cannot be replicated online,' said Watson. According to Spary, many consumers still prefer the tactile experience of shopping in person, and malls can integrate e-commerce by offering click-and-collect services. 'Malls can serve as experiential spaces where brands showcase their products, attracting customers who enjoy the physical shopping experience. Taking into account both cultural shopping preferences as well as the impact of the climate on consumer behavior, increasing e-commerce penetration will add to the overall omnichannel approach that retailers are adopting across the region,' said Spary. Sundeep Khanna, partner at ADL, said that the growth of the e-commerce sector is not cannibalising shopping malls, but is actually complementing them. 'Today's consumer expects seamless integration between all channels, and this benefits physical as well as digital retail in terms of driving footfall, experience, and convenience,' said Khanna. Attracting international brands Spary told Arab News that the transformation and upgrade of retail offerings in the market of Saudi Arabia will pave the way for new international brands to enter and grow within the Kingdom, contributing to the country's wider economic goals. According to the CBRE official, the entry of new brands will not only enhance consumer choices but also stimulate a competitive environment that encourages brand expansion and attracts investment. 'CBRE is currently seeing record levels of demand from international brands looking to expand into the region. This demand is likely to continue given the robust and ever-maturing nature of this market,' said Spary. Cointet noted that Saudi Arabia has become an attractive destination for global fashion, luxury, and food and beverage retailers, drawn by the population's strong spending power and the rise of premium mall spaces such as Riyadh Park and Mall of Arabia. 'Mall expansion goes hand-in-hand with pro-investment reforms — for example, Saudi Arabia now allows 100 percent foreign ownership in the retail sector, encouraging international companies and developers to invest directly,' added Cointet. The Arthur D. Little official further stated that the expansion of shopping malls in the Kingdom will also provide local brands with unprecedented opportunities to establish a national and international footprint. 'This is critical for developing the Saudi economy and I anticipate we will see more Saudi-owned brands enter the world stage in the coming years,' added Cointet. Potential challenges The experts also highlighted some of the challenges in Saudi Arabia's retail landscape, particularly surrounding shopping malls, including oversupply. 'Whilst there's certainly a risk of oversupply with many large projects due to be delivered over the course of the next two to three years, the need for continuous innovation and adaptation to changing consumer trends will be crucial for the sustainability of shopping malls in the Kingdom,' said Spary. The CBRE official further said that new attractions, entertainment options, and cultural elements will play a pivotal role in reshaping the retail landscape in the market. Spary added that the integration of these features will create a more engaging and immersive experience for consumers, ultimately redefining how shopping is perceived and enjoyed in the Kingdom. Cointet expressed a slightly different view, stating that the demand for malls in Saudi Arabia is expected to rise in the coming years due to population growth. He explained that this challenge could be addressed by developing large-format mega malls that serve as destinations in themselves, alongside smaller community malls designed to offer convenience at the local level. In April, a separate analysis by S&P Global said that oversupply, changing retail preferences, and pressure on rental yields amid elevated capital expenditure by landlords could exert pressure on the Kingdom's retail sector. According to the US-based agency, the volume of retail projects in the pipeline raises the risk of potential oversupply, particularly in secondary locations where demand may not be sufficient to absorb new retail spaces. Discussing the risk of oversupply, Cointet said: 'Saudi Arabia's aggressive development pipeline of new retail space underway — raises the risk of too much supply coming to market, which could pressure occupancies and rents in some areas, or even threaten the launch of some of the programs.' He added: 'Landlords and developers may need to differentiate their properties with unique experiences, dining, and entertainment offerings — and even offer lease incentives — to avoid saturation and keep shoppers engaged in an evolving retail landscape.'
Arab News
6 hours ago
- Arab News
Saudi Arabia leads bold transformation to tackle water scarcity
RIYADH: Saudi Arabia is confronting one of the world's most urgent environmental challenges: water scarcity. Faced with limited natural freshwater resources and a rapidly expanding population, the Kingdom is taking decisive steps to secure water availability for future generations. Central to this ambitious transformation is a strategic focus on the 'Three As' of water management: availability, accessibility, and affordability. In recent years, Saudi Arabia has become a global leader in water desalination, investing heavily in cutting-edge technologies and large-scale infrastructure projects. These efforts are not only reshaping the nation's water landscape but also setting an example for other arid regions grappling with similar issues. Speaking to Arab News, Tariq Nada, executive vice president of the Center of Excellence at ACWA Power, highlighted the Kingdom's dominant role in the water sector. 'The Kingdom's current desalinated water supply capacity stands at over 12 million m3/day with a target to reach approximately 20 million m3/day by 2030,' Nada explained. He further noted: 'As of 2024, the Kingdom had committed $6.28 billion in ongoing projects focused on water distribution, water treatment plants, wastewater collection projects and wastewater treatment plants.' Nick Strange, principal at Arthur D. Little, pointed out Saudi Arabia's massive achievements over the past five decades. 'The country plans to more than double its desalination capacity to around 20 million m³/d by 2030. New mega plants are under development in strategic locations including the Eastern Province, Makkah, Jazan and Madinah (regions). In parallel, the transmission network will also be expanded in scale and reach to accommodate the growing demand and new production hubs,' he told Arab News. Strange added: 'However, the Kingdom is not relying on desalination alone. Recognizing the importance of water sustainability, Saudi Arabia is also accelerating efforts in wastewater treatment and reuse. Current treated water capacity is 6-7 million m³/d, with approximately 30 percent being utilized.' Saudi Arabia's approach includes deploying advanced, energy-efficient technologies such as reverse osmosis systems and integrating renewable energy sources into desalination and wastewater treatment plants. Meanwhile, the reuse of treated wastewater is gaining momentum as part of a wider push for sustainable resource management. Public-private partnerships have been instrumental in driving this transformation, accelerating investments and expediting the development of critical infrastructure. Nicolas Boukhalil, PwC Middle East's energy, resources and sustainability deals leader, emphasized the benefits of opening the sector to international competition. • Saudi Arabia is poised to make major strides in water infrastructure, innovation, and resource management — key to securing supplies, boosting the economy, and advancing Vision 2030. • Saudi Arabia's approach includes deploying advanced, energy-efficient technologies such as reverse osmosis systems and integrating renewable energy sources into desalination and wastewater treatment plants. 'These partnerships are introducing new technology, improving efficiency, and making water more affordable for homes, businesses, and farmers alike. The result: a more sustainable financial model that eases pressure on public budgets and supports long-term economic growth,' he said. He also stressed the importance of distribution networks, stating, 'Producing water is only half the battle, getting it where it's needed is just as critical. That's why major investments are also going into water transmission networks, storage reservoirs, and smart management systems.' Hani Tohme, partner and Middle East and Africa sustainability lead at Kearney, shed light on the current wastewater situation. 'Saudi Arabia treats over 6.5 million cubic meters of municipal wastewater each day, yet only around 25 percent of that is reused, with wastewater network coverage reaching approximately 65 percent,' he said. The National Water Strategy aims to boost treatment and reuse significantly by 2030 — targeting treatment of up to 10 million cubic meters daily and reuse rates of 70 percent. Tohme explained: 'This enables groundwater preservation, supports industrial and agricultural reuse, and reduces dependency on energy-intensive desalination — which still provides 60 percent of urban water supply today.' Enhancing water security Saudi Arabia's expansion of desalination and water purification is a cornerstone of Vision 2030, reinforcing national water security and the Kingdom's broader transformation goals. Nada from ACWA Power sees investment in advanced desalination as a critical response to water scarcity that also promotes economic growth through job creation and industry development. 'Since its inception, ACWA Power has consistently been an early adopter of new technologies, in full cooperation and collaboration with the full ecosystem, led by KSA Water offtaker, SWPC, achieving 87 percent reduction in specific power consumption over the last decade. This commitment to innovation is reflected in the company's ongoing efforts to integrate sustainable and cost-effective water solutions,' Nada said. From Arthur D. Little's perspective, these initiatives boost economic diversification and elevate Saudi firms globally. The Kingdom's current desalinated water supply capacity stands at over 12 million m3/day with a target to reach approximately 20 million m3/day by 2030. Tariq Nada, executive vice president of the Center of Excellence at ACWA Power 'For businesses, this presents significant opportunities across engineering, clean technology, and supply chain localization — while for the nation, it reinforces resilience, global competitiveness, and leadership in addressing one of the 21st century's most pressing challenges: the sustainable management of water,' Strange explained. PwC also notes the alignment between the Kingdom's water strategy and Vision 2030's goals of economic diversification and sustainability. 'As global demand for desalination and sustainable water solutions rises, Saudi Arabia has the tools, talent, and ambition to become a world leader in water technology, creating new revenue streams while solving a shared global issue,' Boukhalil said. Kearney's Tohme emphasized the wastewater sector's growing role in attracting private investment. 'For businesses, this creates significant opportunities in EPC contracting, localization of technologies including membrane technologies, operations and maintenance, and treated water offtake agreements, particularly in industrial zones and giga developments,' he said. Evolution of water purification In 2025, Saudi Arabia is poised to make major strides in water infrastructure, innovation, and resource management — key to securing supplies, boosting the economy, and advancing Vision 2030. Highlighting upcoming developments, Nada said: 'In 2025, we anticipate an increased integration of renewable energy, with water desalination plants increasingly powered by solar energy and battery energy storage systems, further reducing their environmental impact and operational costs.' He added: 'We also expect to see a rise in the deployment of advanced membrane technologies, where next-generation membrane technologies will improve the efficiency and effectiveness of RO plants, reducing energy consumption and increasing water recovery rates.' Nada also pointed to the role of digital technologies: 'Digital technologies, such as AI, including machine learning, (will) enable real-time monitoring, optimization, and predictive maintenance of water purification plants.' Kearney's Tohme foresees three major shifts by 2025. He expects accelerated deployment of decentralized purification plants in underserved and remote areas, adoption of digital twins and predictive maintenance technologies to reduce operational costs and non-revenue water, and the strategic integration of treated water into agriculture and district cooling systems. He concluded: 'These trends are not just technical — they enhance Saudi Arabia's economic resilience by separating water supply from climate stress.'
Arab News
6 hours ago
- Arab News
Rabbit's quick commerce model takes off in Saudi Arabia
RIYADH: Early users of quick commerce company Rabbit in Riyadh are already showing promising signs of engagement, with weekly reorder rates comparable to those in the company's more mature Egyptian market, Arab News has been told. This strong early traction points to a positive product-market fit as the Cairo-based startup expands into Saudi Arabia. Rabbit officially launched operations in the Kingdom in early 2024 and is aiming to replicate its hyper-growth strategy by tailoring its model to each city — starting with Riyadh. 'A more indicative, and exciting, insight is that we are seeing early users in Saudi Arabia already having a reorder rate of around one order a week,' said Ahmad Yousry, co-founder and CEO of Rabbit, in an interview with Arab News. 'This is in line with our much more established customer base in Egypt, which is a compelling sign for us,' he added. Rabbit has already delivered more than 40 million items to 1.4 million users in Egypt, a market that has served as a foundational blueprint. However, the company is taking care not to simply copy and paste its strategies. 'Hence, we adopt a tailored approach, focused on building city-by-city and being highly nimble as a company, which has already proven key,' said Yousry. Within six weeks of launching in Riyadh, Rabbit built a network of dark stores covering half of the city. Its goal is to expand across the remainder of the capital and into additional cities over the next 24 months. Dark stores — also known as micro-fulfillment centers or dark warehouses — are retail or distribution hubs designed exclusively to handle and process online shopping orders. Known for its ultra-fast service, Rabbit is maintaining its performance standards in Saudi Arabia. 'Our goal is to deliver over 94 percent of our orders within the promised time frame,' Yousry said, referring to Rabbit's 20-minute delivery commitment. Rabbit aims to deliver 20 million items in Saudi Arabia by 2026, forecasting exponential — not linear — growth. While the company has not disclosed current delivery volumes or active user numbers in the Kingdom, Yousry emphasized the importance of retention over vanity metrics. 'We focus on methodically growing the number of households that depend on Rabbit on a weekly basis,' he said. A more indicative, and exciting, insight is that we are seeing early users in Saudi Arabia already having a reorder rate of around one order a week. Ahmad Yousry, co-founder and CEO of Rabbit In Egypt, Rabbit recorded 2.5 times year-on-year growth in the first quarter of 2025, highlighting the scalability of its operational model. Yousry cautioned against direct comparisons, saying: 'The unit economics for both markets are quite different. We try not to base our growth strategy on comparative analytics, but rather on adapting the operational learnings from one market to another and building a sustainable business model around them.' According to Yousry, increasing customer numbers and basket sizes are central to sustainable growth. 'There are two fundamental ways to grow the business in a sustainable and organic manner: acquire more customers and, or, increase the basket value per customer. We aim to focus on both of these elements,' he said. A major element of Rabbit's regional strategy is local sourcing. In Egypt, over 60 percent of products are sourced from local suppliers, and the company is pursuing a similar — or higher — ratio in Saudi Arabia. 'In Saudi Arabia, we are currently on track to have even more local brands on the platform,' Yousry said. 'Our partner-first focus, and our commitment to growing local brands and empowering local entrepreneurs, has significantly paid off in Egypt and we expect to see the same in Saudi Arabia.' Beyond fulfillment, Rabbit is prioritizing customer experience, emphasizing both convenience and reliability. 'While speed is incredibly important, to be successful in the e-grocery market, you must also focus on the other key elements of the customer experience: convenience and reliability,' said Yousry. 'Our customers know they can count on us to deliver speed, convenience, and consistency.' Technology, particularly artificial intelligence, plays a critical role in Rabbit's operations. The company is applying AI to enhance inventory management, logistics, and user engagement. 'AI is a fundamental enabler of our operations and future growth in Saudi Arabia,' Yousry said. • Within six weeks of launching in Riyadh, Rabbit built a network of dark stores covering half of the city. Its goal is to expand across the remainder of the capital and into additional cities over the next 24 months. • Rabbit aims to deliver 20 million items in Saudi Arabia by 2026, forecasting exponential — not linear — growth. • Rabbit has already delivered more than 40 million items to 1.4 million users in Egypt, a market that has served as a foundational blueprint. 'We are leveraging AI for sophisticated inventory management to predict demand accurately and minimize stockouts, ensuring product availability for our customers.' Rabbit also uses machine learning to personalize the shopping experience within the app. 'We are utilizing proprietary machine-learning solutions to provide tailored product recommendations and a more engaging shopping experience for our users in the Kingdom,' Yousry added. The decision to launch regionally with Saudi Arabia was driven by the size and structure of its grocery sector. 'The food and grocery market is valued at $60 billion, yet the current online grocery transactions in Saudi Arabia are at a lower rate, sitting at 1.3 percent, than the likes of the UAE and the US,' said Yousry. 'Riyadh is transforming at lightning speed, providing us with the opportunity to meet the shift in customer behavior and demands.' Understanding and adapting to local consumer behavior has been central to Rabbit's entry into the market. 'Consumers in Saudi Arabia prioritize convenience, quality, and new technologies for a seamless shopping experience,' said Yousry. He added that, unlike Egypt — where purchases tend to be daily and need-based — Saudi shopping habits are more occasion-driven. 'In Egypt, the pattern leans more toward daily or impulse-driven purchases, often tied to single packs for immediate needs or smaller households.' Rabbit's mission is closely aligned with Saudi Arabia's Vision 2030, particularly in areas such as digital infrastructure development and support for small and medium enterprises. 'We are helping to accelerate the growth of the digital economy in a growing sector that is yet to reach its digitization potential,' said Yousry, adding: 'We are building and leveraging state-of-the-art technology across our entire supply chain, aligning directly with the Kingdom's vision for a diversified and digitally empowered future in two key sectors: logistics and retail.' Supporting local entrepreneurs remains a central pillar of Rabbit's regional operations. 'Our commitment to local sourcing and partnerships with SMEs provides a platform for these businesses to reach a wider customer base and scale their operations,' he said. 'We hire local and build locally. We pride ourselves on being a hyperlocal company. We are not bringing Rabbit to Saudi Arabia; we are instead building Rabbit Saudi Arabia by Saudi hands.' Looking ahead, Rabbit sees Saudi Arabia not only as a key growth market but also as a launchpad for broader expansion. 'We are very excited for the future of Rabbit in the GCC region,' said Yousry. 'We are already profitable in our first market, Egypt, and we look forward to building on this as we expand,' he stated. 'We see Saudi Arabia as a champion market for the reasons already mentioned. We are focused on growing sustainably and expanding our footprint in the Kingdom, ultimately reaching profitability,' the CEO added.
