Riyadh: International retail brands attracted by social and economic shifts in Saudi Arabia are set to drive real estate sector growth, according to a recent analysis.

The residential real estate sector also appears strong, with young Saudi families relocating to cities in search of work opportunities.

This strengthening of the real estate sector is one of the key goals outlined in Vision 2030, which aims to diversify the economy away from oil and position the Kingdom as a global business and tourist destination.

The Real Estate General Authority expects the property market to reach $101.62 billion by 2029, with an anticipated compound annual growth rate of 8 percent from 2024.

S&P Global noted that Saudi retail real estate growth prospects are strong due to significant social and economic changes in the Kingdom making it a major target market for international brands in the fashion, luxury, and food and beverage segments.

However, challenges such as oversupply in the shopping mall sector are anticipated, with forecasts suggesting Riyadh's supply will grow by 50 percent and Jeddah's by 75 percent by 2027.

The report also highlighted that Dubai and Abu Dhabi are experiencing resilient demand and modest rental growth for retail real estate, while cautioning that economic slowdowns due to unfavorable tariffs or geopolitical conflicts could negatively impact the real estate sectors in these regions.