The retail market across the Kingdom of Saudi Arabia (KSA) is expected to remain in the downward cycle due to the VAT increase and the suspension of public sector allowances, indicates JLL. These factors are expected to further fuel contractions in consumer spending, particularly in the food and beverage market.
The entertainment market, however, is still growing in Saudi Arabia, with demand exceeding the available supply. This is likely to minimise the impact of additional costs due to the VAT over the short to medium term.
Overall, Saudi Arabia’s real estate sectors remained soft during quarter two, although the residential market remained somewhat active and saw several key projects delivered across the Kingdom’s major cities, according to JLL’s 2020 mid-year review report.