Oversupply causes rent prices to fall

RIYADH — Small businesses that emerged during the previous economic boom have been struggling to stay afloat, forcing many owners to make the most difficult decision any business owner has to make: Close permanently or stay open and continue to lose money. According to a report in Al-Riyadh daily, an increasing number of business owners are choosing to cut their losses and permanently close shop, a trend that has pushed commercial rent prices down by around 30 percent. Real estate intermediaries estimate around 20 percent of small business have closed their offices in the capital. Real estate agent Abdullah Habib said the trend of small businesses closing began last year, but the pace has increased in 2017. He said it could take months to lease or rent out offices. Habib added that the closure of small business offices overshadowed the level of rents, something that indicates a remarkable drop in rent prices. “The real estate rental market is experiencing a severe recession since the beginning of the year in anticipation of a future that looks bleak at the moment,” he said.