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Though falling oil prices may have made a dent in the country’s economy, one sector which continues to boom here is retail. New mall announcements and Dubai’s successful Expo 2020 hosting bid have placed the UAE at the center of a global retail revolution.
Regional retailers and mall owners are investing heavily in new technologies and trained manpower to maintain profitability and attract customers.
A.T. Kearney’s Global Retail Development Index (GRDI) lists the UAE in the top 10 most popular markets for expansion among international retailers. As part of the study, 60 retail executives from around the world were asked to identify emerging competitive trends and verify the rankings. The index confirmed that the UAE is the second highest ranking country in market attractiveness, out of all the countries which took part.
For many international retailers, Dubai remains the preferred entry point into the Middle East and North Africa for new products and brands.
Last year, Abu Dhabi opened its largest shopping and entertainment destination, Yas Mall on Yas Island. The mall added 2.5 million square feet to Abu Dhabi’s retail supply, which is a significant addition to the sector.
In Dubai, a popular real estate developer has made a huge move by announcing 1.5 million square feet of shopping, dining and entertainment space at Jumeirah Village Triangle’s Al Khail Avenue. Mall of the World, which is estimated to cost Dh25 billion, is expected to offer 14.7 million square feet to the retail industry.
In short, the UAE retail space market provides an overwhelming amount of choice for investors and it is increasing day by day. However, one of the biggest challenges the sector faces is the overpricing of prime locations for retail square footage. Another setback is some customers’ affinity for Internet shopping as opposed to brick-and-mortar stores.
* Dubai is preferred entry point into MENA region for new products
* Yas Mall added 2.5 million square feet to capital’s retail space
* Retail sector’s huge challenge is overpricing of prime retail spots
Source: Zenifer Khaleel, Special to Properties
The writer is a freelancer