29 April 2008

Dubai: The influx of mega malls in Dubai may have an impact on smaller and older shopping centres, but there is certainly enough footfall to sustain the expansion in retail space, industry experts say.

Ashish Panjabi, chief operating officer of Jacky's Electronics, brushed aside fears that Dubai is over expanding its mall space, saying that the continued growth of the city's population and tourists will be more than sufficient to keep up with the surge in shopping centre supply.

"With the general growth in the size of the local population within the UAE and the increased numbers of tourists expected, we still do see opportunities for the new malls coming up." Panjabi told Gulf News.

"It is impossible for the current number of malls to cater to demand if your tourist traffic doubles as is expected to happen in the next three to five years," Panjabi added.

Retail International statistics have shown that Dubai has the greatest agglomeration of retail space in the whole Middle East and North Africa region with some 1.3 million square metres gross leasable area already finished and more underway.

Dubai is expected to see an explosion in shopping centre supply with the completion of at least nine complexes: Dubai Mall, Oasis Mall, Mirdiff City, Mall of Arabia, as well as the five malls recently announced by Nakheel.

Experts had earlier expected these malls to trigger high vacancy rates in smaller and older malls in Dubai.

Mega complexes

Michael Kercheval, president of the International Council of Shopping Centres, said consumers are now going for mega complexes, where shopping and entertainment offerings are more varied than those at traditional centres.

"Consumers quite frankly have come to expect and demand the broadest possible assortments in any shopping centre destination. This is leading many developers to rethink the future of shopping centres," Kerch-eval said during the Middle East Council of Shopping Centres.

He noted that in the United States many smaller centres built in the '70s and '80s have been converted into open-air centres, as new regional complexes coming to the pipeline are offering spaces bigger than 800,000 square feet.

"In many countries, most of these larger centres are incorporating more non-traditional stores and large-format food and entertainment components. Rather than being perceived as anchors, these tenants are more like magnets," Kercheval said.

Panjabi said building new malls in Dubai is a welcome move, as consumers are consistently looking for an element of "newness."

"It becomes boring to keep going to the same mall week after week, so you end up in a situation where for the 52 weeks in a year, you end up dividing your time between all the different malls in the country," he added.

By Cleofe Maceda

Gulf News 2008. All rights reserved.