Dubai Property: Retail rush

Mall of the WorldThe Mall of the World will have air-conditioned walkways l Image Credit: Gulf News Archives

Even as Dubai maintains a high ranking in the world of retail, the sector continues to evolve to cater to an even wider market. Mixed-use developments and mall expansions are highlights in the city’s retail real estate space.

In this year’s edition of How Global is the Business of Retail? property consultancy CBRE says Dubai is the second-most important international shopping destination globally for the fourth consecutive year. It has a presence of 55.7 per cent of international retailers, closely trailing London, which has 58 per cent. Shanghai (53.4 per cent), New York (46.3) and Singapore (46) make up the rest of the top five international cities for retail representation. Dubai attracted 45 new international brands last year, including high-profile retailers Hollister, Cavalli Caffe and McQ by Alexander McQueen.

Nicholas Maclean, Managing Director of CBRE Middle East, says Dubai leads due to its superior global air connectivity and status as a hub for trade between the East and West.

“Dubai continues to remain the clear destination of choice for the majority of brands looking to enter the region for the first time, frequently using the emirate as a stepping stone to wider regional expansion programmes,” he says.

While it retains its magnetism to retailers around the world, the supply of retail real estate is slowly evolving. “The quality of available retail space is an added incentive for global retailers looking for expansion and key projects — such as Mall of the World — promise a healthy future outlook,” says Hamad Bu Amim, President and CEO of the Dubai Chamber of Commerce and Industry.

Most large-format malls in the emirate are undergoing expansion, even as the city continues to deliver new supply of innovative retail projects such as the BoxPark on Al Wasl Road.

“Dubai’s retail pipeline consists mainly of existing mall expansions, including the Dubai Mall, Mall of the Emirates and Ibn Battuta Mall, in addition to Nakheel Mall and The Pointe [on the Palm Jumeirah] currently under construction,” says Erik Volkers, Senior Consultant, Research and Consultancy at CBRE Middle East. “Additionally, there are key master plans to be developed in the next decade, mainly Dubai Creek Harbour and Mall of the World, with projected malls larger than the Dubai Mall, which will potentially change the emirate’s retail landscape drastically.”

Dubai has a retail stock of 2.34 million sq m. CBRE says the retail supply pipeline will be around 675,000 sq m between this year and 2018.

Mega malls are a continued source of attraction for both shoppers and retailers, says Anurag Bajpai, a partner at KPMG. “However, at the same time over the past few years we have also seen the development of a number of smaller community malls, servicing the needs of people living in its vicinity.

"As Dubai continues to grow, attracting more tourists and residents alike, we will continue seeing this trend of mega malls thriving and existing along with smaller community malls addressing different needs of shoppers," he says.

Mall culture

Despite the establishment of high-street shopping districts, Dubai's mall culture is alive and well. Retailers such as Majid Al Futtaim (MAF) Ventures, which is currently investing in both mega malls and community malls under the My City Centre Nasseriya retail concept, say residents account for 70-80 per cent of

sales. However, community malls are not the only outlets for this demand. "The UAE retail sector will continue to see strong growth this year, driven by robust inbound tourist numbers and demand for new brands in the region, with almost all retailers using the UAE as a hub for their entry into the GCC," says Ahmed Galal Ismail, CEO of MAF Ventures.

Volkers adds, "Dubai has a very strong resident population with spending power and a retail culture. Not only community malls, but also the mega malls benefit from this, with around 60 per cent of the Dubai Mall visitors last year estimated to be UAE residents and other GCC tourists, according to Emaar Malls."

Bajpai says, "The challenge with high-street concepts in Dubai is to make them all-season, all-weather destinations for shoppers. How the shoppers take to these concepts in the months when the weather is not very conducive to spending time outdoors has to be seen."

However, the novelty and the appeal are undeniable - this is after all only the first year for many of the new attractions. "The retailers would also need to think smartly about their year-round offering to consumers with attractive pricing or a new range [of attractions] to keep them interested and coming back throughout the year,'' says Bajpai.

Similar developments have been successful in New York, London. Paris and Christchurch. 'The success of these concepts in the UAE would encourage developers to come up with similar ones [for] changing customer requirements,'' adds Bajpai.


In recent times, a bigger trend in Dubai's retail real estate is the prevalence of mixed-use developments.

Volkers says, “In new mixed-use developments and master plans such as Dubai Creek Harbour and Mall of the World, we see retail increasingly integrated within other asset types, rather than a stand-alone building.”

Experts say the trend is visible around the world and Dubai has taken to it well. “Over the past several years, mixed-use developments have taken centre stage in the urban planning and this is also apparent in the UAE where mega projects are the norm. These mixed-use projects are incomplete without retail outlets and hospitality.”

He cites several examples of mixed-use developments in the UAE that have been successful and are contributing to retail growth, such as Jumeirah Lakes Towers, Dubai Marina, Discovery Gardens, Dubai Motor City Dubai Silicon Oasis, Yas Island and Marjan Island. The supply pipeline of these projects is strong as well — with developments such as Dubailand, The Lagoons, Culture Village, Jumeirah Garden City, Dubai Meydan City, La Mer, Mohammad Bin Rashid City and Al Maryah Central expected to be fully completed in the next few years — and is expected to add much vibrancy to the retail sector.

Source: Shalini Seth, Special to Property Weekly


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