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Dubai and Abu Dhabi lead the way in the region, consistently featuring in the top twenty global markets for new entries
Dubai – Dubai is ranked the most important international shopping destination globally, according to the 2018 edition of “How Global is the Business of Retail?” by leading global property advisor CBRE. Knocking London off the top spot, Dubai now takes home number one position, with 62 percent of global retailers present in the emirate.
During 2017, Dubai welcomed 59 new retail brands, moving the emirate up one place from last year to second place, when it comes to new market entrants. Over 40 per cent of these new retailers were from Europe, with close to 50 percent coming from the Coffee and Restaurant category, including brands such as the French healthy eating concept Wild & The Moon. Hong Kong once again topped the list of new market entrants in 2017 with 86 new brands. Taipei (52), London (49) and Tokyo (46) came in third, fourth and fifth place respectively.
Despite weaker consumer sentiment, Abu Dhabi’s retail market still attracted a host of new international retailers in 2017, the majority of which were in the Coffee and Restaurant category, followed by Mid Range Fashion. New F&B entrants included fine-dining concepts Coya and La Petite Maison, which both opened in Maryah Island’s Galleria Mall. Dalma Mall, with 150,000 sqm of gross leasable area (GLA), also welcomed a number of new global brands from Asia, Europe and North America.
Commenting on the report, Nick Maclean, Managing Director, CBRE Middle East and Turkey Region, said, “Dubai remains the most attractive market in the region for retailers, with many using the emirate as a ‘launch pad’ for regional expansion.
Advancements in retail technology and e-commerce have, however, forced retailers to rethink their strategies. Several retailers are changing their approach in the market with a focus on opening digital platforms and increasing operational efficiencies.”
“The UAE will see the delivery of a significant amount of retail space over the next five years. Together with the expected growth in online shopping and the increased importance of F&B, entertainment and the hybrid concept of ‘edutainment’, the value of ‘bricks and mortar’ outlets and the contractual relationship between landlords and tenants is set to change substantially going forward,” continued Maclean.
The UAE’s F&B sector has shown an upward trajectory as consumer spending on socialising and eating out continues to grow with UAE nationals and expatriates alike. There is particularly keen interest in the healthy and organic food sector, which aligns with the market orienting towards wellness and lifestyle.
According to the report, over the next three years, more than 1.5 million sqm of new retail space could be delivered to the Dubai market, adding roughly 50 per cent to the existing inventory. This amounts to roughly 70 per cent of the total future retail supply for the UAE over the same time period and underlines the massive real estate market transformation that is occurring in the build-up to Expo 2020.
H.E. Hamad Buamim, President and CEO Dubai Chamber of Commerce and Industry, said, "Dubai's leading position in this year's rankings demonstrates the growing competitiveness and strengthening global appeal of the emirate's retail sector.
Despite changing market conditions, the growth outlook for the market remains very robust, supported by key factors such as rapid expansion, rising number of tourists, Expo 2020 and a significant amount of new retail space expected to come online, as well as strong consumer demand for global brands and unique retail experiences."
H.E. Buamim noted that Dubai Chamber is supporting the growth of Dubai's retail sector and the emirate's fast-growing e-commerce market as it works with the newly-established Retail Business Group to capitalize on new growth opportunities and serve common interests, while it also attracts premier international events to Dubai which effectively showcase the potential of Dubai's retail market and cement the emirate's reputation as one of the world's most sought-after shopping destinations.
“Leading retailers globally continue to choose Majid Al Futtaim’s shopping malls in the UAE as their regional launch destinations as well as the preferred locations for their flagships based on a number of factors, including our unmatched customer experience, the quality of our retail curation, and our commitment to innovation. Dubai’s status as the top global shopping destination underscores the long-term potential of our home market, where we are committed to investing in delivering great moments for everyone, everyday – our enduring promise to retail partners, tourists, residents, and the millions of lives that Majid Al Futtaim’s shopping malls touch annually,” said Ghaith Shocair, Chief Executive Officer of Shopping Malls at Majid Al Futtaim – Properties.
Globally, the report revealed the Coffee and Resturant category continues to dominate with a quarter of all new entrants coming from this sector. International retailers targeted a wide range of new markets in 2017, with 123 cities having at least one new international brand open for the first time. Of the brands expanding into new markets, 41 per cent targeted more than one city. Seven of the top-20 target markets in 2017 were new to the list, with Phnom Penh the only emerging market featuring in the top-20 for the first time.
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About the CBRE How Global is the Business of Retail? Report
Now in its 11th year, CBRE’s ‘How Global is the Business of Retail?’ report identifies the target markets of international retailers in 2017, looking at 47 countries and 122 global cities to provide a comprehensive view of the markets that international retailers entered for the first time.
Methodology
The retailers were selected based on a variety of sources including surveys of retailers’ turnover and brand presence, global and national retail directories and the views of the local CBRE professionals on the dominant retailers in their markets. From these sources, 334 leading international retailers were identified as representative of the global retail community. For each of the retailers in the sample, research was undertaken to identify whether they had a presence in each of the 61 countries and 191 cities included in the study.
When determining whether a retailer was present in a market, the survey required a retailer to be operating a stand-alone store within the country or city concerned. Concession operations within a department store and units within airports were generally discounted for the purposes of the study.
Given that the vast majority of the significant countries in the global economy were included, at national level the results provide an accurate picture of how global each of the retailers are.
However, it is clearly possible for retailers to be present in many more cities than were included in this research: for example, the project only examines 17 cities in the United States and only one or two cities in many other countries.
While some retailers may indeed only be present in these dominant cities, others will have a much more extensive network which provides greater penetration of the national market. Equally, the study only looks at presence in a city on a yes/no basis – it takes no regard of how many outlets a retailer may have in each city. It is therefore important to bear this in mind when interpreting comments about how “international” markets, sectors or retailers may be; such comments should be viewed in the context of the methodology of this research.
Analysis of the 334 brands is only carried out every other year and any reference to rankings made outside of this time are estimates and not based on a full analysis.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2017 revenue). The company has more than 80,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
About Dubai Chamber of Commerce & Industry
Established in 1965, Dubai Chamber of Commerce & Industry is celebrating its milestone anniversary of 50 years empowering vision in Dubai’s business community. A non-profit public entity, Dubai Chamber supports Dubai’s vision as a global player by empowering businesses, providing innovative value added services and access to influential networks. Its mission is to represent, support and protect the interests of the business community in Dubai by creating a favourable business environment, supporting the development of business, and by promoting Dubai as an international business hub. For more information visit: www.dubaichamber.com
About Majid Al Futtaim
Founded in 1992, Majid Al Futtaim is the leading shopping mall, communities, retail and leisure pioneer across the Middle East, Africa and Asia.
A remarkable business success story, Majid Al Futtaim started from one man’s vision to transform the face of shopping, entertainment and leisure to ‘create great moments for everyone, every day’. It has since grown into one of the United Arab Emirates’ most respected and successful businesses spanning 15 international markets, employing more than 40,000 people, and obtaining the highest credit rating (BBB) among privately-held corporates in the region.
Majid Al Futtaim owns and operates 23 shopping malls, 12 hotels and three mixed-use communities, with further developments underway in the region. The shopping malls portfolio includes Mall of the Emirates, Mall of Egypt, City Centre malls, My City Centre neighbourhood centres, and four community malls which are in joint venture with the Government of Sharjah. The Company is the exclusive franchisee for Carrefour in 38 markets across Middle East, Africa and Asia, and operates a portfolio of more than 230 outlets in 15 countries.
Majid Al Futtaim operates 322 VOX Cinema screens and 34 Magic Planet family entertainment centres across the region, in addition to iconic leisure and entertainment facilities such as Ski Dubai, Orbi Dubai and Ski Egypt, among others. The Company is parent to the consumer finance company 'Najm', a fashion retail business representing international brands such as Abercrombie & Fitch, AllSaints, lululemon athletica, Crate & Barrel and Maisons du Monde. In addition, Majid Al Futtaim operates Enova, a facility and energy management company, through a joint venture operation with Veolia, a global leader in optimised environment resource management. The Company also owns the rights to The LEGO Store and American Girl in the Middle East and operates in the food and beverage industry through a partnership with Gourmet Gulf.
www.majidalfuttaim.com
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