DUBAI - Industry estimates value investments in shopping malls and related infrastructure in the the UAE to exceed Dh25 billion by 2006. The competition in UAE's retail sector is intesifying with ever growing stakes as new shopping malls are announced at frequent intervals.
With the new investments of more than Dh7 billion announced this year, the total available retail space is expected to double in next three years. Major players in the sector believe that though the competition is expected to intensify, there is enough space for all.
Emaar Properties, which has already begun the development of the Dubai Mall, billed to be the largest mall in the world argues that the available retail space in UAE is nowhere near saturation and there is enough scope for further development. The Dh2.6 billion shopping colouses will have 5 million square feet of retail space.
With the rapid growth of tourism sector in the UAE, the new Mall developers are hoping to attract visitors, especially the regional tourists to fill the malls. All UAE airports are just 2-3 hours flight distances from major markets including India, Iran, Pakistan and the rest of the Middle East countries. "With the fast growing economies of these countries with high concentration urban middle class there is huge scope for attracting these upwardly mobile to the fashionable malls in the UAE," said a consultant with Singapore-based DTZ Debenham.
Dubai Mall expects to attract 35 million visitors in the first full year of business, with a continuing growth of 20 to 30 per cent a year. One of the key components of this unique retail portfolio will be a host of first-time brands in Dubai, which will occupy 45 per cent of the Mall's retail space.
Along with Dubai Mall, Dubai has other massive retail space projects under construction such as Nakheel's Garden Mall and Al Futtaim Group's Dh3 billion Mall of Emirates on the Shaikh Zayed Road.
While major established players like Wafi City and Burjuman Centre are undergoing makeovers and expansions, other existing players, including EMKE Group and the Dubai based Lals Group have announced their intention to build new malls. Emke has unveiled the Khaleediya Mall in Abu Dhabi with more than 800,000 square meters of retail space.
The long time market leader in Dubai, Al Futtaim Group's Deira Citi Centre has replicated their success in Sharjah and Ajman. City Centre claims that it maintains market leadership despite intense competition from new malls. "City Centres have clear strategy for meeting competition head on with relationships with retailers and unparalleled levels of customer service," said Peter Walichnowski, CEO of Majid Al Futtaim Investments.
Recent research shows that every individual in the UAE spends an average of $30 a day on consumer goods while the residents spend an average of 15 hours a week in shopping malls. In the next few years the retail spending in the UAE expected to grow by Dh9 billion to 35 billion.
Explaining the economic rationale behind such large scale development as Dubai Mall, Mohammed Ali Al Abbar, Chairman of Emaar Properties, said that the per capita retail space available in the UAE is far less compared to the US and the Far East.
While it is about 17 square feet per head in the US and 9 square feet in the Far East, in Middle East it is just about 2 square feet per head. When larger population centres such as India, Iran and Pakistan are considered as potential markets for UAE's mushrooming mall business, the argument makes immense business sense.
Taking the cue from the mall boom in Dubai and Abu Dhabi investors have started building new malls in Sharjah, Ajman and Ras Al Khaimah. Sharjah is home to as many as half a dozen medium sized malls in addition to Mega Mall and Sahara Centre.
While Ras Al Khaimah has two in operation and three more in the pipeline, Ajman has issued licences for three new malls in the emirate.BY BABU DAS AUGUSTINE
© Khaleej Times 2004
