- Broker Directory
- My Tools
- News & Advice
- Market Trends
- Other GN Sites
International retailers are vying for retail space in the UAE, creating waiting lists at Dubai’s major malls and spurring expansion of existing venues and new developments.
According to CBRE’s report, How Global is the Business of Retail?, cross-border retail continues to gain momentum with Dubai retaining the number two spot for international retailer representation for the third consecutive year.
“Retail is very important for Dubai in terms of trade and tourism,” said Hamad Buamim, President and CEO of Dubai Chamber of Commerce and Industry. “Retailers reported a 10-15 per cent growth last year and we expect [more] growth going forward. Let’s work together to get Dubai to the first spot.”
Meanwhile, Abu Dhabi holds the fourth position among the top 20 hottest retail markets globally.
“Abu Dhabi still lags behind in terms of offering, so developers are confident about developing plenty of retail space,” said Nick Maclean, Managing Director of CBRE Middle East. “The UAE has waiting lists for large retail units.
“UK and US retailers are frustrated by the lack of space,” said Maclean. “Around 100 are waiting to get into Mall of the Emirates [MoE] and about the same number into The Dubai Mall.”
Maclean also noted that rising rents don’t seem to be a concern, especially with European retailers.
Abu Dhabi and Dubai are considered mature markets, but follow different trends.
“Abu Dhabi’s new retailers, such as at The Galleria and upcoming Yas Mall, have helped improve the ranking of the UAE overall, following the global trend where luxury fashion dominates new market entrants. Dubai, however, signals a mature market expansion,” said Maclean.
Cafés and restaurants account for the largest retail segment that want to operate in Dubai, followed by a mix of retailers that include pet shops and pharmacies and then by mid-range fashion brands.
Experts say the ongoing expansion of large malls, such as The Dubai Mall and MoE, and the development of a super mall at Mohammad Bin Rashid City will complement Dubai’s goal of attracting 20 million tourists in 2020.
“There is room for a large mall for the future,” said Maclean. “The market capacity to absorb more retail is there.”
The report also revealed that it is the smaller retailers that are looking to grow faster, while the large ones are more focused on consolidating their footprint and expansion. However, Dubai may have to fast-track new projects for small retailers.
“We don’t have room for the smaller retailers,” said Maclean. “We need to create retail space for them within residential areas.”
While a number of major retail projects are underway such as the Nakheel Mall and Le Pointe on The Palm Jumeirah, the ongoing trend bodes well for smaller community malls and retail strips, which are springing up around Dubai, such as The Beach and City Walk.
Majid Al Futtaim (MAF) Properties, which is spending Dh22 million to redevelop the Deira City Centre and around Dh1 billion to expand MoE, is also investing in the new community mall concept. Five are already operating in Sharjah under the Matajer brand through MAF’s Sharjah Holding joint venture with the government, while Dubai will have its first My City Centre in Tecom’s IMPZ.
“We’ll be growing Vox cinemas and moving existing and new retail around,” said George Kostas, CEO of MAF Properties. “There is a lot of demand from residents to create a lifestyle. The market isn’t at risk of saturation. We’re investing Dh3 billion today, seeing an enormous potential to build more for both tourists and residents.”
MAF’s malls in Dubai saw an 8 per cent growth in footfall last year. Interestingly, 75 per cent of shoppers at MoE are UAE residents.
“Tourism is great to have, but our business is focused on residents,” said Kostas.
The rise in retail has also brought challenges as retailers are crying out for logistic support. “Shelves shouldn’t have to wait for two to three months to be restocked,” said Maclean. “This is a great opportunity for developers, cautious up to now, to build logistics infrastructure. The surge in residential development is leading to the commercial sector catching up.”
Source: Nicole Walter, Special to Property Weekly