As Dubai leads, Abu Dhabi creates its own niche

Abu Dhabi's Yas Mall opened in November. The city has 1.45 million sq m of retail stock / Image Credit:  Gulf News Archives.Abu Dhabi's Yas Mall opened in November. The city has 1.45 million sq m of retail stock / Image Credit: Gulf News Archives.

The two emirates have varying retail real estate requirements and are developing strong shopping personalities of their own, each staying true to its own vision.

According to the 2015 edition of How Global is the Business of Retail? by property consultancy CBRE, Abu Dhabi ranks third among the top target markets by new entrants. Retail is fast becoming a global affair with half of the 164 cities surveyed attracting at least five new retailers. According to the survey, Abu Dhabi has 55 new brands.

"The increased number of new retailer brands entering Abu Dhabi has been driven in part by a significant increase in supply in the capital amid the opening of a number of new malls, most notably Yas Mall, which opened in November," says Nicholas Maclean, Managing Director of CBRE Middle East.

In addition, Abu Dhabi's retail market has witnessed substantial addition over the past two years with the opening of new malls such as The Galleria and Capital Mall, increasing the capital's retail footprint.

Erik Volkers, Senior Consultant, Research and Consultancy at CBRE Middle East, says that Dubai continues to dominate the retail sector in the UAE with retail stock of 2.34 million sq m, compared to 1.45 million sq m in Abu Dhabi.

"In the medium term that is unlikely to change with retail supply pipeline in the capital around 226,000 sq m compared to about 675,000 sq m in Dubai from 2015-18." Dubai and Abu Dhabi vary in terms of space allocation, focus on segments and development pipeline.

"A much higher proportion of the retail space supply in Dubai is made up of super or mega malls as compared to Abu Dhabi," says Anurag Bajpai, a Partner at KPMG. There are other points of difference. While Dubai is now seeking to create road-facing shopping structures, its retail real estate is still largely organised.

"Abu Dhabi has a higher percentage of its total retail real estate supply outside of malls as compared to Dubai," says Bajpai.

As a relatively recent retailer magnet, Abu Dhabi also offers lower rents. "On average, rentals in Abu Dhabi are lower compared to rentals in Dubai. Similarly, rental real estate vacancies are lower in Abu Dhabi compared to Dubai," says Bajpai.



Source: Property Weekly


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