Phase 3: Coffee Shop Location in Saudi Arabia – Selection & Leasing Guide
Almost everything in a café can be improved — except a bad coffee shop location.
Selecting a location is the most irreversible decision you will make. In Saudi Arabia, the “Location Game” has evolved. Years ago, visibility on Tahlia Street was enough to succeed. Today, customer behavior has split the market into defined “zones,” each rewarding different types of cafés.
If you open a quiet study café in a noisy drive-thru hub, you will fail — no matter how good your coffee is.
This guide breaks down the best neighborhoods in Riyadh (and other major cities), realistic rental prices, and how to navigate the Ejar leasing system without getting scammed.
📍 1. The Strategy: Destination vs. Convenience
Before you look at a map, decide which game you are playing.
A. The “Destination” (Third Place)
- The Vibe: High-end interiors, comfortable seating, reliable Wi-Fi. People come to stay for 2-3 hours.
- Ideal Locations:
- Riyadh: Al Malqa, Al Yasmin, Hittin (The Boulevard area).
- Jeddah: Al Rawdah, Al Shatea.
- Rent Cost: High. You are paying for the “prestige” of the address.
B. The “Convenience” (Drive-Thru / Pickup)
- The Vibe: Speed. Customers don’t care about your chairs; they care about your queue time.
- Ideal Locations: Gas stations on main arteries (e.g., King Salman Rd, Northern Ring Rd), or “Container Parks.”
- Rent Cost: Variable. High for main road frontage, low for “Ghost Kitchen” setups.
C. The “Community” (Neighborhood Gem)
- The Vibe: A walkable spot for locals.
- Ideal Locations: Emerging residential districts like Al Narjis or Al Arid (North Riyadh).
- Rent Cost: Moderate. High growth potential as the neighborhood fills up.
🗺️ 2. Riyadh Neighborhood Guide (2025 Data)
Riyadh is expanding North. If you are targeting the modern Saudi spender, look North.
| District | Vibe | Price Tier | Best For… |
| Hittin | Luxury, Trendy, Crowded | 💸💸💸💸 (Very High) | Premium concepts, Flagship stores. |
| Al Malqa | Upper-Class Residential | 💸💸💸 (High) | Specialty coffee, Breakfast spots. |
| Al Yasmin | Business + Residential | 💸💸 (Med-High) | Work-friendly cafes. |
| Al Narjis | Emerging, Construction heavy | 💸 (Medium) | Long-term investment, Community cafes. |
| Al Olaya | Old Money, Business Hub | 💸💸💸 (High) | Business meetings, Lunch crowd. |
| Labn / Tuwaiq | West Riyadh, High Density | 💸 (Affordable) | Volume sales, Drive-thru. |
💰 3. Rental Benchmarks: What Should You Pay?
Landlords in Saudi Arabia often quote prices as a “Total Annual Sum” for the shop, or “Per Square Meter.”
- Shell & Core (Concrete box): You do everything (flooring, AC, plumbing).
- Average: SAR 800 – 1,800 per sqm.
- Fully Fitted (Previous Cafe): Ready to move in (sometimes requires “Key Money”).
- Average: SAR 2,000 – 3,500+ per sqm.
Example Calculation:
A 60 sqm shop in Al Malqa (Shell & Core) at SAR 1,500/sqm:
- Base Rent: SAR 90,000 / year.
- Hidden Costs: Expect +10% service charge or “maintenance fee.”
💡 The “Taqbeel” Trap (Key Money):
You will often see ads for a “Ready Shop for Rent.” The current tenant will ask for “Taqbeel” (Key Money) to transfer the lease to you.
- Be careful: Why are they leaving? If they failed, is the location cursed?
- Audit: Only pay Taqbeel if the equipment and fit-out are in perfect condition and worth the price.
📝 4. The Ejar Contract: Your Legal Shield
In 2025, paper contracts are illegal for commercial licensing. You must use the Ejar digital network.
Why Ejar Matters:
- Balady Integration: You cannot issue a Municipal License without an active Ejar contract number.
- Protection: If the landlord locks you out or refuses maintenance, Ejar is your proof.
Critical Lease Clauses to Negotiate:
- Usage (Nashat): Ensure the contract explicitly says “Commercial – Coffee Shop / Restaurant”. If it says “Office” or “Showroom,” you may struggle to get a Civil Defense permit for a kitchen.
- The Grace Period (Fatra Samah):
- You are renting a concrete box. You need time to build it.
- Standard Ask: 2 to 3 months rent-free at the start of the contract for fit-out.
- Pro Tip: Don’t sign until you get at least 45 days.
- Power Capacity: Ensure the contract states the Electrical Load (Kilowatts). A coffee shop needs 30-60 KW (3-Phase). If the shop only has 10 KW, upgrading it with the Electric Company (SEC) can cost you SAR 20,000+ and take months.
🚩 5. Red Flags: Walk Away If…
- No Parking: “Customers can park in the neighborhood” is a lie. Neighbors will complain, and Balady will fine you.
- No Gas Line: If you plan to bake heavily, you need gas. Retrofitting gas safety systems is expensive.
- Shared Water/Electric: Ensure you have your own separate meter. You do not want to pay for your neighbor’s usage.
- Short Term: Avoid 1-year contracts. Aim for 3 to 5 years. You don’t want to build a beautiful cafe only to be evicted next year.
✅ Phase 3 Checklist: Assessing a Location
Take this list with you when viewing a shop.
- [ ] Zoning: Is the building approved for F&B (Food & Beverage)?
- [ ] Power: Is there at least 40 KW of power available?
- [ ] Drainage: Is there a connection for a commercial grease trap?
- [ ] Ceiling Height: Is it at least 3.5 meters? (Needed for AC ducting).
- [ ] Parking: Are there at least 3-4 dedicated spots?
- [ ] Ventilation: Is there a route to run an exhaust pipe to the roof? (Mandatory for smell control).
What’s Next?
You found the spot. You signed the Ejar contract. Now, you have an empty concrete box. It’s time to call the architects and contractors.