SAUDI ARABIA ENTERTAINMENT THE GAME CHANGER 4 INTRODUCTION
6 ENTERTAINMENT TIMELINE
8 KEY UPCOMING PROJECTS
14 MACROECONOMIC ENVIRONMENT
CBRE 2 CONTENTS
20 SPOTLIGHT ON EVENTS
28 ENTERTAINMENT REAL ESTATE LANDSCAPE
32 IMPACT ON REAL ESTATE SECTOR
36 CHALLENGES
3 CBRE INTRODUCTION
CBRE 4 Since the announcement of Saudi Vision 2030 in 2016, the entertainment sector has risen to the forefront of the economic transformation within the Kingdom of Saudi Arabia. With one of the key objectives of the vision focusing on increasing household expenditure related to entertainment and leisure, the Saudi Govern- ment has played a central role in supporting the growth of this important sector through the implementation of a number of key initiatives and regulations, including the lift of the cinema ban as well as the introduction of new tourism visas.
In addition to this and other measures of support, the industry has expanded in line with demand for new and innovative experiences among the significant young Saudi Arabia population, resulting in new opportunities for private sector participants, and more specifically, real estate development and enhancement across the Kingdom’s wide geography.
In this report, we will explore key milestones and developments within Saudi Ara- bia’s entertainment sector as well as the impact on the real estate sector and development opportunities moving forward.
5 CBRE KEY ENTERTAINMENT PROJECTS & INITIATIVES TIMELINE Note: Completion years presented below are based on public information and estimates and may be subject to change
Vision 2030 2017 Women Allowed Announcement to Drive
Cinemas Return 2016 to KSA 2018
2022 Red Sea Project 2021 Phase 1 Completion
Jeddah Opera GCC Railway House Completion 2022 Phase 1 Completion
New Jeddah 2023 Al Ula Phase1 Downtown Completion Phase 1
Qiddiya Phase 1 2023 Completion 2023
2030 Amaala 2028 Completion
Red Sea Project Diriyah Gate Completion 2028 Completion
Jeddah Downtown 2030 Green Completion Riyadh Completion
Qiddiya 2030 Completion 2030
CBRE 6 Entertainment-led Developments Key Demand Generators Government Initiatives Mixed-use Masterplans w/ Entertainment Component
2019 Launch of Saudi 2019 Seasons Program
Launch of Tourist Visa Program NEOM Bay 2019 Airport Completion 2020 Al Widyan (Q4) Completion of Project Launch Riyadh Metro
Amaala Phase 1 2020 Completion 2020 (H1) (Q4)
King Salman 2023 Park Completion 2025
Riyadh NEOM Phase 1 Art Completion 2024 Completion
Saudi Land- Jeddah 2027 bridge Stage 1 Metro Completion Completion
Riyadh Sports 2027 Boulevard Completion 2025
2030/35 Vision 2030 Accomplished
Al Ula Completion 2030
7 CBRE KEY UPCOMING PROJECTS
Entertainment-led Development
Qiddiya Entertainment City Kingdom’s capital of entertainment
Delivery Timeline Key Entertainment Key Real Estate Components Components Q2 2018 Ground Breaking World’s largest “Six Flags” 5 hotels & resorts theme park 2023 World-class Speciality & outlet retail Phase 1 Completion waterpark
2030 Motorsports Multi-family residential “Speed-park” units for sale & lease Project Completion
20,000 seat “Creative Village” clifftop stadium for offices Economic Impact by 2030 Karting facilities Hospital
2,000 seat Welcome 17 million performing arts School visitors annually theatre
18-hole Contribute Light Industrial championship Real Estate SR 17 billion to GDP golf course
Create 18,000 seat multi-purpose Technology Incubator indoor arena 57,000 jobs
Eco-zone for recreational activities & mountain sports
About Qiddiya Entertainment City
Located 40km from Riyadh and covering 334 sqkm, upon completion, Qiddiya will be about three times larger than ‘Disney World Florida,’ making it world’s largest entertainment city. Of the total area, one-third is designated for development totalling approx. 100 sqkm, leaving the rest for natu- ral conservation. Qiddiya is a mixed-use entertainment-led development which will offer various customised experiences under 5 themes: Parks & Attractions, Sports & Wellness, Motion & Mobility, Art & Culture and Nature & Environment. In 2019, the project masterplan was approved, kickstarting the development of this unique development in KSA.
Source: Based on Qiddiya Entertainment City's official website & public sources
CBRE 8 KEY UPCOMING PROJECTS
Mixed-use Masterplan w/ Entertainment Component
The Red Sea Project Unforgettable luxury within an extraordinary destination
Delivery Timeline Key Entertainment Key Real Estate Components Components Q3 2019 Ground Breaking Pristine beaches, canyons Dedicated airport & dormant volcanos Q4 2022 Scuba diving on world’s 8,000 hotel rooms built Phase 1 Completion 4th largest barrier reef system on up to 50 islands
2030 Yacht marina Retail outlets and F&B Project Completion
Natural reserve of marine life Economic Impact by 2030 - 35 Water sports activities Welcome 1 million visitors annually Proximity to UNESO heritage site (Mada'in Saleh) Contribute SR 22 billion to GDP
Create 70,000 jobs
About The Red Sea Project
Located on a 90-island archipelago on the coast of the Red Sea between the cities of Umluj and Al Wajh, The Red Sea Project aims to leverage on some of the Kingdom’s most unique natural treasures. With 200 km of coastline, the project is roughly the size of Belgium and stretches across 28,000 sqkm. The Red Sea Project aims to become a world-class tourism destination, offering various inland and off-land hospitality options coupled with leisure and recreational facilities. Benefitting from prox- imity to 80% of the world’s population within an 8-hour flight time, the project also aims to become one of the world’s best dive sites. Phase 1 is scheduled for completion in 2022 and is planned to include 3,000 luxury and ultraluxury resort keys, an airport, yacht marinas and other leisure facilities.
Source: Based on Red Sea Project's official website & public sources
9 CBRE KEY UPCOMING PROJECTS
Mixed-use Masterplan w/ Entertainment Component
AMAALA The Riviera of the Middle East
Delivery Timeline Key Entertainment Key Real Estate Components Components Q1 2019 Ground Breaking Equestrian Dedicated airport club Q4 2020 World’s longest art 2,500 luxury Phase 1 Completion park, 6km long hotel rooms
2028 Golf 700 residential villas course Project Completion
Tennis 200+ courts retailers Economic Impact by 2030 Marine life museum
4 yacht Contribute marinas 0.6% to GDP
Create 22,000 jobs
About AMAALA
Around 800 km north of Jeddah and stretching 12 km along the northwestern coastline of KSA, Amaala aims to become an ultraluxury resort and wellness destination. To ensure sustainability and preserve the unique natural surroundings, the 3,300 sqkm project aims to be 100% solar-powered and incorporate sophisticated waste management, water desalination and composting programmes. Derived from the Arabic word for ‘Hope,’ Amaala will feature three masterplans – Triple Bay, The Island, and The Coastal Development – respectively centred on the themes of wellness & sports, luxury art residences and sea, sun & lifestyle.
Source: Based on Amaala's official website & public sources
CBRE 10 KEY UPCOMING PROJECTS
Entertainment-led Development
Al Ula Kingdom's hidden natural wonder
Delivery Timeline Key Entertainment Key Real Estate Components Components Q1 2020 Ground Breaking Hiking-friendly Al Ula Airport Expansion mountains
2023 40 hotel keys & 40 Desert campsites Phase 1 Completion residential units under Sharaan Resort
Cultural / 2030 – 2035 1,000 hotel keys under archaeological sites Project Completion ‘Aman Resorts’
Wildlife 5,000 sqm concert hall Economic Impact & natural reserve ‘Maraya’ (completed) by 2030 - 35
Museums F&B outlets Welcome 2 million visitors annually International summit centre Contribute SR 120 billion to GDP
Create 35,000 jobs
About Al Ula
Located 300 km north of Madinah Al Munawara, Al Ula is envisaged to be Kingdom’s main cultural eco-tourism destination, leveraging on key historical and cultural assets, such as Mada’in Saleh, the second largest Nabatean heritage site after Jordan’s Petra and Saudi Arabia’s first UNESCO site. With 23,000 archaeological sites, Al Ula is expected to offer various recreational activities including sightsee- ing, hiking, camping and other desert-friendly sports and festivals. As a part of the site activation, Al Ula hosts the 12-week ‘Winter at Tantora,’ one of the Saudi Seasons events, offering musical concerts, hot air balloon festival, trailing & hiking activities and equestrian-related competitions.
Source: Based on Royal Commission for Al-Ula's official website & public sources
11 CBRE KEY UPCOMING PROJECTS
Entertainment-led Development
King Salman Park The “Green Heart of Riyadh”
Key Entertainment Key Real Estate Delivery Timeline Components Components
Q1 2019 9.3M sqm of green areas 12,000 Project Launch residential units 7.2-km circular Q4 2020 walking trail 2,300 hotel rooms Phase 1 Completion 8,000-seat open-air theatre +500,000 sqm of retail 2024/5 +850,000 sqm Project Completion 18-hole golf course +600,000 sqm of office 50,000 sqm of sports courts
7 museums & Economic Impact 4 art academies by 2024 - 2025 2,500-seat national Welcome 400,000 theatre visitors annually Equestrian centre Create 57,000 jobs Sky diving centre
300,000 sqm of water elements
About King Salman Park
With a total area of 13 million sqm, King Salman Park aims to be world’s biggest city park and about four times the size of Central Park in New York. The park is expected to offer various components related to environment, culture, art and sports. To ensure connectivity and accessibility, the park will be linked to 6 main roads and highways, connected to 5 metro ‘Green Line’ stations and 10 rapid transit stations. Phase 1, covering a total land area of 5 million sqm, has been announced for com- pletion by the end of 2020.
Source: Based on King Salman Park's official website & public sources
CBRE 12 KEY UPCOMING PROJECTS
Entertainment-led Development
Riyadh Sports Boulevard One-stop wellbeing destination
Key Entertainment Key Real Estate Delivery Timeline Components Components
Q3 2019 3.5M sqm of green & F&B outlets Ground Breaking open spaces
340+ km of cycling & Sports-related 2027 horse-riding tracks retail Phase 1 Completion
1M sqm equestrian Multi-storey Sports centre complex Economic Impact by 2030 Rural resorts & 5 sqkm zoo residential developments Create 70,000 jobs* Volleyball & tennis courts
* Aggregate figure as part of the 4 Riyadh projects launched on March 2019: King Salman Park, Riyadh Green, Sports Boulevard, and Riyadh Art.
About Riyadh Sports Boulevard
Part of Riyadh’s four grand projects launched in March 2019, Sports Boulevard or Al-Masar Al-Riya- di, aims to enhance quality of life and support the objective of placing Riyadh within the world’s top 100 livable cities. Featuring 120,000 new trees, the project is expected to offer various sports and reactional facilities across 8 multi-themed zones. The project includes 1 million sqm of land allocated for private investment opportunities among both domestic and foreign investors, allowing them to introduce complementary developments, such as museums, libraries and art studios.
Source: Based on Riyadh Sports Boulevard's official website & public sources
13 CBRE MACRO ECONOMIC ENVIRONMENT
CBRE 14 GOVERNMENT INITIATIVES
In 2016, the Crown Prince of Saudi Arabia, Mohammed bin Salman bin Abdulaziz announced the “Saudi Vision 2030.” Comprising of 96 strategic objec- tives, the aim of this Vision is to diversify Saudi Arabia’s economy and reduce its reliance on the oil industry. The state’s Public investment Fund (PIF) was tasked with investing in companies and developing a series of “Giga projects,” aimed to stimulate growth within non-oil sectors and expand entertainment and tourism offering within the country for both Saudi nationals and foreign visitors.
The entertainment and tourism sectors are at the forefront of this Vision, with the Saudi government committed to transform KSA into a leading entertainment des- tination globally. As announced in early 2018, the Kingdom aims to invest $64 billion in entertainment and amusement over the next 10 years. Along with this investment, the government continues to develop investment opportunities for both national and foreign investors as well as to strengthen collaboration with the private sector and international entertainment specialists to grow KSA’s entertainment and leisure sector.
On November 2019, the Saudi government established a fund that focuses on supporting entertainment, sports and tourism projects. Headed by Crown Prince and Deputy Prime Minister, Mohammed bin Salman, this fund linked to the Na- tional Development Fund (NDF) will be financed from the revenues of the ‘Saudi Seasons Program.’ With the ongoing development of necessary infrastructure, these and other government initiatives are expected to continue being funda- mental in rapidly transforming the country’s entertainment landscape.
15 CBRE ENTERTAINMENT WITHIN KSA’S MACROECONOMIC LANDSCAPE
Population
Saudi Arabia Total Population (2018 – 2024F)
Millions of Persons Population Growth Rate %
37 2.6% 1.3% 3.0% 2.4% 1.4% 36 1.4% 2.5% 1.4% 35 1.7% 2.0% ate (%) 34 1.5% Millions 33 1.0% Growth R 32 0.5% 31 0.0% 2018 2019 2020 2021 2022 2023 2024
Source: General Authority for Statistics (GAS), Oxford Economics FORECASTED MILLION TO INCREASE TO 36.7BY 2024
Saudi Arabia’s total population reached approximately 33.4 million people in 2018 and is fore- casted to increase to 36.7 million by 2024. Notably, 63% of KSA’s population lies between the ages of 20 and 59 years, with 58% under the age of 35. This young population is increasingly seeking differentiated experiences and leisure offerings.
This demographic trend supports the growing demand for entertainment within the Kingdom and subsequent opportunities for diversified offerings in the short to medium term.
CBRE 16 ENTERTAINMENT WITHIN KSA’S MACROECONOMIC LANDSCAPE
Gross Domestic Product (GDP)
Saudi Arabia GDP (2018 – 2024F)
Millions of Persons Population Growth Rate %
7 13.9% 15% 6 13% 5 11% 6.4% 9% 4 7.4% 6.1% 6.1% 6.4% 0.2% 7% 3 5% 2 3% GDP (SAR Trillion) 1 1% GDP Growth (%) 0 -1% 2018 2019 2020 2021 2022 2023 2024
Source: GAS, Oxford Economics
CAGR OF BETWEEN 6.5% 2019 AND 2024
Saudi Arabia’s economy experienced significant growth in 2018, followed by more modest growth in the past year. Despite substantial growth in non-oil GDP (2.8%), oil cuts and lower oil prices resulted in a GDP growth of 0.2% in 2019. Moving forward, GDP is expected to grow at a CAGR of 6.5% between 2019 and 2024, to reach just above SAR 4.0 trillion by the end of the forecast period.
The oil industry has remained the largest contributor to KSA’s GDP, standing at 43% as end of 2018. Nevertheless, moving forward and in line with the government’s effort to diversify the economy, oil contribution to GDP is expected to slightly decrease, as other economic sectors grow, to reach a contribution of 40% by 2024. The entertainment sector is expected to be one of the key non-oil sectors continuing to contribute to wider GDP growth within the Kingdom.
17 CBRE ENTERTAINMENT WITHIN KSA’S MACROECONOMIC LANDSCAPE
Mada'in Saleh, Al Ula, KSA
CBRE 18 ENTERTAINMENT WITHIN KSA’S MACROECONOMIC LANDSCAPE
Tourism
Saudi Arabia Tourist Trips – Inbound & Domestic (2018 – 2024F)*
Millions of Trips Tourist Trips
100M 91M 110 83M 70M 76M 64M 82 58M 55
Millions 27
2018 2019 2020 2021 2022 2023 2024
* Excluding day trips
Source: The Tourism Information Research Centre (MAS) part of Saudi Commission for Tourism & National Heritage (SCTH)
FORECASTED MILLION TRIPS TO INCREASE TO 100 TOURIST BY 2024
As of 2018, the Kingdom received almost 60 million tourist trips. This number is expected to con- tinue increasing in line with wider government reforms to expand the tourism sector and its offer- ing across the country, to ultimately reach 100 million tourist trips by 2024. As part Vision 2030 and the National Transformation Program, 447 visitable heritage sites are expected to be com- pleted by the end of 2020, up from 241 sites in 2017, highlighting just one of the many exam- ples Saudi Arabia aims to enhance its tourism profile.
Furthermore in September 2019, a new tourist e-visa program was made available to citizens of 49 countries, with over 23,000 visas issued within the first 10 days of the e-visa launch. These and other government initiatives support the growth of tourism and, by extension, the leisure and entertainment sectors, which in addition to catering to the needs of the Saudi population also aim to provide a range of new offerings for international tourists.
Note: Day trip refers to same-day visitors who travel outside their place of residence and return the same day, without staying overnight in the destination visited. Tourist trip refers to visitors who stayover at least one night in the destination visited.
19 CBRE SPOTLIGHT ON EVENTS
CBRE 20 Music, sports and social events play a key role in expanding the Kingdom’s wider entertainment and leisure offering and capitalizing on the strong demand for a differentiated entertainment experience among the Saudi pop- ulation. Based on the latest figures from 2018, a total of 5,000 events were held across the Kingdom, more than double the figure from the previous year. 2019 followed along the same upward trend, witnessing a wide range of events, welcoming both local artists and musicians as well as world-class performers and sports events.
Another major events program, driven by the Saudi Commission for Tourism & National Heritage (SCTH) and the General Entertainment Authority (GEA), was Saudi Seasons which was launched in March 2019. This program is a year-round entertainment festival, which is held across multiple locations and features a wide variety of entertainment and cultural experiences for both domestic and international audiences. Saudi Seasons consists of 11 different festival periods in a different province each period. This event-based festival has relied heavily on ‘transformative placemaking’ to deliver human-centric destinations, while activating historical sites, vacant lands and existing real estate assets. Furthermore, Saudi Seasons has witnessed the development of both temporary and permanent revenue-generating entertainment assets, which serve to enhance the attractiveness and footfall of the developments in proximity to festival locations beyond the Saudi Seasons period.
21 CBRE SAUDI SEASONS 2019/20 TIMELINE
2019 Mar Apr May Jun Jul
01 Eastern Prov. Mar 14 - Mar 30
02 Ramadan May 6 – Jun 3
03 Eid Al-Fitr Jun 4 – Jun 8
04 Jeddah Jun 8 – Jul 18
05 Taif
06 Al Soudah
07 National Day
08 Al-Diriyah
09 Riyadh
10 Al-Ula
11 Hail
Source: Saudi Season official website
CBRE 22 2020 Aug Sep Oct Nov Dec Jan Feb Mar
Aug 1 – Aug 31
Aug 1 – Aug 31
Sep 19 – Sep 23
Nov 22 – Dec 21
Oct 11 – Jan 31
Dec 19 – Mar 7
Dec 22 – Feb 10
23 CBRE SAUDI SEASONS IN NUMBERS
OVER 01 Eastern Prov. 3.2M+ Mar 14 - 30 visitors (16% of 30 MILLION which are VISITORS international) 02 Ramadan 2M+ 3,000+ May 6 – Jun 3 Visitors EVENTS AND ACTIVITIES 03 Eid Al-Fitr 5M+ Jun 4 – 8 Visitors
As of September 2019, Saudi Sea- 04 Jeddah 14.9M sons had welcomed over 30 million Jun 8 – Jul 18 visitors (16% of visitors and had completed 3,000+ which are events and activities. international)
Ongoing festivals have also been largely successful, with the Riyadh 05 Al Soudah 2.8M+ Season, for example, being extended Aug 1 – 31 Visitors to the end of January 2020 as a result of strong visitorship.
06 Taif 0.3M+ Aug 1 – 31 Visitors
07 National Day 3.7M+ Sep 19 – 23 Visitors
Source: InvestSaudi.sa
CBRE 24 116 9 3,000+ Activities & programs Cities participated Seasonal jobs
21 5 100M+ Activities & programs Cities participated Online impressions
1,150+ 90 24hr Activities & programs Cities participated Open malls
1,500+ 5 $102M Activities & programs Destinations Economic Impact
70 4 3,000+ Activities & programs Destinations Seasonal jobs
25+ 10+ 36M+ Activities & programs Zones Online reach
184+ Kingdom 6,800+ Activities & programs Wide events Seasonal jobs
25 CBRE SAUDI SEASONS SNAPSHOT
Riyadh Season
Riyadh Season is a two-month-long festival (Oct 11 – Jan 31) which offers unique entertainment experiences in line with the theme: ’Imagine!’. Due to the high demand and popularity of the season, the festival was extended until the end of January 2020, from its original conclusion date in mid-December 2019. This season is the largest of the ‘2019 Saudi Seasons Program,’ covering more than 14 million sqm of land across 12 designated entertainment zones. Riyadh Season offered ticket-based events, including sports events, music concerts, gaming championships and an illusion-based art gallery, as well as:
100+ musical, theatrical, sports and art events
80+ local and international retailers at Riyadh Shopping Festival
30+ international pop-up restaurants
In addition, the festival offered various facilities and services including an open-air cinema, danc- ing fountain, amusement park and ice skating rink. As of mid December, Riyadh Season has gen- erated more than SAR 1 billion in revenues, attracted more than 10 million visitors to Riyadh and generated more than 50,000 direct and indirect jobs.
CBRE 26 SAUDI SEASONS SNAPSHOT
Diriyah Season
Kicked off during Riyadh Season, Diriyah Season is a month-long season (Nov 22 – Dec 21) which hosted region’s most exclusive international sports championships and entertainment events. Taking place at the UNESCO heritage site, Diriyah, the festival extends over 130,000 sqm land across 4 different zones, with capacity of 30,000 visitors per day and 10,000 parking spaces. Driyiah Season was home to the region's first world heavyweight title boxing match at Diriyah Arena, a purpose-built temporary structure that covers 3,500 sqm and accommodates 15,000 people. The festival also hosted the ‘Diriyah E-Prix’, which represents the opening round of the ABB FIA Formula E Champion- ship. Moreover, Diriyah welcomed 8 of the world’s top 20 tennis players to compete at Saudi Arabia’s first international tennis tournament, Diriyah Tennis Cup 2019.
Cup of Diriyah Tennis 'Clash on the Dunes' boxing fight Diriyah Equestrian Festival counted Championship held at the 15,000-seat Diriyah towards qualification for the Tokyo Arena 2020 Olympics
Diriyah E-Prix 2019 | ABB FIA Italian tennis player Fabio Fognini at British professional boxer Anthony Formula E Championship held at Diriyah Tennis Cup Joshua, winner of 'Clash on the Riyadh Street Circuit Dunes' Diriyah fight
27 CBRE ENTERTAINMENT REAL ESTATE LANDSCAPE
CBRE 28 The growth of the entertainment sector has resulted in significant shifts in the real estate landscape and the built environment. Beyond the traditional amusement and water parks, other types of entertainment spaces have emerged as a response to increased demand for innovative experiences. New offering across the Kingdom ranges from sports complexes and recreational parks to new F&B concepts and botanical gardens. Saudi Arabia seeks to leverage the unique pro- file and natural characteristics of each province to develop an offering, which complements the country’s wider entertainment landscape, while developing a distinctive brand, theme and capabilities within the various destinations.
Nevertheless, there are a number of key entertainment spaces which transcend geographical differences and which have witnessed increased demand across the wider Kingdom – cinemas, Family Entertainment Centres (FEC) and edutain- ment.
29 CBRE ENTERTAINMENT REAL ESTATE LANDSCAPE
Cinemas
The end of the 35-year-long ban on cinemas unleashed the Kingdom’s entertainment sector and was a key milestone in demonstrating the tremendous potential for the wider industry moving forward.
In addition to an increasing number of international cinema operators within the Kingdom, such as AMC Theatres and VOX Cinemas, the cinema industry witnessed the birth of a home-grown cinema chain, fully run by Saudi nationals. Opening first at Jeddah’s Mall of Arabia on August 2019, Muvi Cinemas signed an MOU with Arabian Centres to expand to 250 screens by end of 2020. Muvi Cinemas is but one example of the large growth plans among cinema operators, with the Kingdom committed to deliver 45+ cinemas across the country by 2020, in line with the Quality of Life Program (QoL).
From a real estate perspective, retail developers are increasingly tailoring their new and existing projects to accommodate the requirements of cinema operators, with the aim of differentiating their projects and increasing footfall. In an increasingly competitive market, those developments which include a cinema have reaped the benefits of enhanced footfall and subsequent performance within their wider retail projects.
cinemas in KSA 45+by 2020
CBRE 30 ENTERTAINMENT REAL ESTATE LANDSCAPE
Family Entertainment Centers (FECs)
FEC’s represent another growing entertainment space within the city’s existing and planned retail developments. As part of Invest Saudi, the Saudi government has highlighted a number of opportunities for private sector investment in developing these concepts across the Kingdom, in line with increased demand for these types of projects.
As competition in this particular segment of the entertainment market increases, developers and operators which make use of new technologies, such as Virtual Reality (VR) and Augmented Real- ity (AR) will be able to differentiate and tailor their offering in line with shifting demand trends and dynamics.
Opportunity to 80+ across the develop and operate FECs Kingdom
Edutainment
‘Edutainment’ or educational entertainment, is a method of engaging audiences in interactive entertainment while learning. The opening of Kidzania and other similar concepts has paved the way for the wider sector, which has witnessed steady growth across the region. During Jeddah Season 2019, Spacetoon, one of the leading edutainment companies in the Arab region, offered 3 edutainment events at Mall of Arabia, Al Yasmeen Mall and Red Sea Mall. Similarly, Sharqia Season 2019 hosted edutainment events and competitions challenging children’s mental and practical skills.
In the future, it is expected that edutainment concepts will continue to emerge and occupy an increasing share of space within traditional retail locations.
31 CBRE IMPACT ON REAL ESTATE SECTOR
CBRE 32 Undoubtedly, the growth of the entertainment sector has had a significant impact on the real estate market, with effects witnessed most directly within the retail and hospitality sectors across the Kingdom’s cities.
33 CBRE IMPACT ON REAL ESTATE SECTOR
Hospitality: Riyadh Hospitality: Jeddah
Riyadh Hospitality Supply (2020 - 2024) Jeddah Hospitality Supply (2020 - 2024)
Current Supply Future Supply Current Supply Future Supply
Current (H2 2019) 2020 - 2024 Current (H2 2019) 2020 - 2024
17,700 22,200 13,900 20,200 Keys Keys Keys Keys
Source: CBRE Research & Analysis Source: CBRE Research & Analysis
During Riyadh Season 2019, Riyadh’s hospi- During Jeddah Season and Eid Season tality sector recorded the highest November 2019, a number of hotels along the Cor- occupancy rate since 2007, with strong occu- niche and within the Al Shatee district record- pancies during the last three months of the ed occupancy rates of 85% to 95%, driven by year. the high number of visitors. To further evidence this uptick in demand, close to As the entertainment industry expands, the 7,000 visas were issued specifically for hospitality sector is expected to follow. visitors to the Jeddah Season. Increased hotel supply between now and 2023 is expected to support the growth in By 2024, the number of hotels in Jeddah is tourist demand driven by an increased enter- excepted to reach more than 20,000 rooms, tainment and leisure offering across the city. with key hotels under construction including Jeddah Four Seasons Hotel, Jeddah Rixos Key entertainment-led projects are also Hotel and Anantara Jeddah Hotel. expected to contribute to future hospitality supply, resulting in integrated tourism / entertainment projects. King Salman Park, for example, is planned to include 16 hotels and 2,300 rooms upon completion. Similar- ly, upon the completion of Phase 1 (2023), Qiddiya is expected to house 5 hotels to support its Six Flags amusement park.
CBRE 34 IMPACT ON REAL ESTATE SECTOR
Retail: Riyadh Retail: Jeddah
Riyadh Hospitality Supply (2020 - 2024) Jeddah Hospitality Supply (2020 - 2024)
Current Supply Future Supply Current Supply Future Supply
Current (H2 2019) 2020 - 2024 Current (H2 2019) 2020 - 2024
2.9 M 3.5 M 1.5 M 2.1 M sqm GLA sqm GLA sqm GLA sqm GLA
Source: CBRE Research & Analysis Source: CBRE Research & Analysis
In recent years, Riyadh’s retail market has The 2019 Saudi Seasons Program has been increasingly witnessed the entrance of com- successful in attracting international dining munity and neighbourhood malls with a and retail outlets to the Kingdom as part of strong focus on F&B, such as The Zone or temporary pop-up concepts. As the King- The Boulevard. During Riyadh Season 2019 dom’s economy grows, it is expected that the alone, the city attracted 70 home-grown presence of international brands and F&B Saudi retailers, 10 international brands as concepts is likely to expand in line with well as +30 world-famous eateries as part of sustained demand among the Saudi popula- the wider festival offering. tion for innovative dining experiences.
With almost one-third of KSA’s household By 2024, Jeddah’s retail market is expected retail spend dedicated to F&B and Restau- to witness considerable supply growth, rants combined, F&B is expected to continue reaching over 2 million sqm GLA. As com- representing a key driver of retail develop- petitiveness in the market increases, those ment moving forward. In addition to F&B, developers which are able to differentiate other entertainment and leisure components their offering by attracting new brands and are increasingly featuring within retail tenant F&B concepts are expected to outperform mixes, with the aim of driving footfall and their competitors. retail sales. Retail developers seek to capital- ize on these growing segments of the retail landscape, with total retail space in the capi- tal expected to reach 3.5 million sqm GLA by 2024.
35 CBRE CHALLENGES
Diriyah clay castle, Riyadh, KSA
CBRE 36 Recent changes to the country’s visa rules have been instrumental in setting the foundation for the development of a robust entertainment profile within the Kingdom. Furthermore, the creation of a strong events platform, incorpo- rating both local and world-class acts will also serve to place Saudi Arabia on the map as an top entertainment destination within the region. Moving forward, however, there still remain a number of challenges and key implica- tions to consider in order to unlock the full potential of the country’s entertain- ment sector.
Communicating KSA’s unique tourism and entertainment offering to global audiences will continue to play a central role in attracting visitors and further cementing the country’s non-religious tourism ambitions. Foreign direct investment (both capital and business creation) will also continue to increase in importance as the country diversifies its economy. Finally, private sector involvement and investment across the entertainment industry’s many branches will be instrumental in reaching the ambitious objectives of Saudi’s Vision 2030.
37 CBRE CONTACTS
For questions regarding the real estate market in Saudi Arabia, please contact:
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Asma Dakkak Yazeed Hijazi Mohamd Alkhateeb Abdullah Altheraawi Senior Manager, Senior Analyst, Senior Analyst, Analyst, Consulting Consulting Consulting Consulting
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CBRE 38 HOW CAN CBRE HELP YOU?
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CBRE SAUDI ARABIA ENTERTAINMENT THE GAME CHANGER