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Abu Dhabi and Dubai combined to rank 17th globally in terms of shopping centre development, according to a report by CBRE. Of the 41.9 million sq-m retail space being developed worldwide, the two emirates currently account for 626,887 sq m (more than 361,000 sq m in Dubai and around 265,760 sq m in Abu Dhabi), an 11 per cent rise on last year’s figures.
According to CBRE, the Middle East retail market remains a very attractive proposition for international brands. Dubai ranks second for international brand presence, driven by high per capita income, significant growth potential and a high-spending consumer base. Retailers from Europe and the US, which continue to look for new locations for future expansion, are increasingly seeing the region as a viable alternative to more mature markets and without some of the risk normally associated with emerging markets.
As demand continues to gain strength, developers remain bullish, which is reflected in the size of the development pipeline. “The Middle East offers a tried-and-tested marketplace for investors with less risk than those normally associated with emerging markets,” explains Matthew Green, Head of Research and Consulting, CBRE Middle East.
Some of the projects that will be completed in the UAE over the next three years include Nakheel Mall, which comprises around 111,000 sq m of gross leasable area (GLA) and is expected to be completed in 2018, and The Point, which has a total GLA of 48,000 sq m and is due to open next year, both on the Palm Jumeirah. In Abu Dhabi, the next super-regional shopping mall to be completed is Maryah Central, which will offer around 146,000 sq m of GLA.
Global shopping centre completions have started to slow as the global retail market suffers from an imbalance in supply and demand, according to the CBRE report. Despite this, there continues to be exceptional levels of construction activity, particularly in Asia.
China remains the most active market in terms of delivery of new space, accounting for two-thirds of construction globally.
Cities such as Chongqu-ing, Shenzen, Chengdu and Shanghai all have over 3 million sq m of space under construction in over 30 projects in each city.
Emerging markets such as Manila, Moscow, Mexico City and Bangalore, are highly active as well, but activity in Eastern European markets has slowed due to economic and political uncertainty.
“The challenge remains for those markets with high levels of saturation and weakening demand, where pre-leasing activities continue to be a struggle,” the report says.
Source: Shalini Seth, Special to Property Weekly