Tuesday, Nov 09, 2010

Gulf News

By the end of this year or early next, more than 200,000 square metres of extra space for shops will be available in major developments

Dubai While no one disputes the firepower Dubai retains as the region’s shopping capital, Abu Dhabi is preparing to challenge the title.

Abu Dhabi could be on a par with Dubai within three years, observers say.

While Dubai put its high-profile retail expansion on hold at the height of the downturn, Abu Dhabi continued to move ahead and is now poised to increase its retail space from 1.4 million square metres to more than 2.5 million by 2013, Jones Lang LaSalle, a real estate services firm, said.

By the end of this year or early next, the company said well over 200,000 square metres of additional space would be available in major retail developments such as the Paragon Mall in Reem Island, Mushrif Mall on Airport Road, and the final section of Dalma Mall and BMC Mall near Mussafah.

Largest spread

Retail International said Dubai still had the largest shopping spread in the region, with 2.9 million square metres of completed gross leasable area (GLA).

But the growth in new space had reached a plateau as no new malls were expected until 2013, Jones Lang LaSalle said.

Dubai’s delayed projects, which are expected to expand retail floor space by one million to 1.2 million square metres, may be subject to further delays as retailers remain cautious in the light of current market dynamics.

These projects include the Mall of Arabia, another in Dubai Sports City and the Al Ghurair City extension.

Unless Dubai resumes its expansion very soon, property developers predict that Abu Dhabi’s shopping space will have caught up with Dubai’s in three years.

Simon Thomson, principal at Retail International, said: “As a shopping destination, either in the UAE or more widely in the Mena (Middle East and North Africa) region, there is still no other retail offer that comes into the same league as Dubai for quantity, quality and range of brands.”

Thomson said Abu Dhabi had had limited retail capacity until recently.

“Whether it will outpace Dubai in terms of growth remains to be seen, but it seems unlikely given the retail growth Dubai experienced is almost unique — certainly in the Middle East — and unlikely therefore ever to be replicated,” he said.

Abu Dhabi’s retail sector enjoyed a number of inherent advantages. Euromonitor International reported this year that Abu Dhabi had not been as badly affected by the crisis as Dubai, owing to its reliance on huge oil reserves and sovereign wealth funds.

“This partial insulation from the global economic downturn, coupled with remarkable developments, are expected to help Abu Dhabi rise up as the new leading shopping and tourism destination of the UAE,” the report said.

“As far as retailing is concerned, this emirate benefits from the fact that it is less dependent on an expatriate labour force than Dubai.” And Abu Dhabi also launched several signature developments which include local galleries of the internationally renown Louvre and Guggenheim museums, and of course, Formula One racing.

Future look

Colin Beaton, managing director of Limelight Creative Services, said unless Dubai continued to invest and push the envelope in retail brands and a supporting environment, “there will come a day when Abu Dhabi is on par with Dubai”.

Meantime, while Abu Dhabi has a compelling list of attractions, the city does not have the critical mass of malls, brands, facilities and amenities that Dubai has. “The appeal of Dubai as a retail destination to consumers is not linked directly to macro-economic issues,” Beaton said. “It’s more personal, immediate and benefit-driven.”

GULF NEWS ARCHIVE/Abdul Rahman

Sale away

While Abu Dhabi has growing attractions, it does not have the critical mass of malls, brands, facilities and amenities that Dubai has.

trend

assessment

poor shopping quality

While Abu Dhabi has attracted a number of leading brands, the quality of most of its older shopping areas leaves much to be desired, said Jones Lang LaSalle in its October report.

“The quality is generally poor in terms of design, tenant mix, access configuration and car parking,” said Jones Lang LaSalle. In terms of quality stock relative to high disposable population income and rising tourist spend, the report said Abu Dhabi was currently undersupplied by approximately 700,000 square metres of gross leasable area.

— C.M.

By Cleofe Maceda?Staff Reporter

Gulf News 2010. All rights reserved.