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Middle East and North Africa The economy and retail demand grew again in 2012 in

the Middle East, fueled by increasing tourist flows and new projects. When country risk and market potential are compared, the Middle East features several of the most attractive markets in the Index. Many industries and markets consolidated as they matured. Consumers across the region are becoming more sophisticated, demanding differentiated product and retail formats, with trends such as fresh food taking hold as young consumers strive for healthier lifestyles. Some markets, such as Saudi Arabia, remain largely untapped, with major development potential and retail space availability growing. Online sales are gaining popularity but remain a minuscule share of retail sales. United Arab Emirates: A growing appetite for

differentiated offerings. The UAE (fifth) rises two spots, as its high retail sales and per-capita consumer spending, greater consumer confidence, slight population increase, and position as a regional tourism hub make it an attractive destination for retailers. Malls are investing heavily in increasing their area and

improving their mix of tenants. According to Jones Lang LaSalle, Dubai’s gross leasable area (GLA) will increase 14% by 2015, and in Abu Dhabi, where mall space is scarce (the vacancy rate is 2%), GLA will rise 48%. Dubai is already home to the Mall of Arabia, which, at 4 million sq. ft. of GLA, is the largest in the nation and the Middle East; plans are in the works for the Mall of the World, which would be the largest mall in the world. Demand continues to grow in Dubai, even as it is fully

saturated with global brands. European concepts are fully represented now and no longer offer a way for malls to stand out. Demand is now shifting to American concepts and food and beverage. In 2012, Dubai saw the entry of U.S.-based brands Victoria’s Secret, Cheesecake Factory and IHOP through franchise agreements. Majid Al Futtaim Fashion announced a joint venture with U.S. apparel retailers Abercrombie & Fitch and Hollister. Retailers are updating and repackaging existing

offerings. Chalhoub Group, a leading luxury retailer, opened the largest shoe store in the world in Dubai Mall, featuring brands such as Gucci, Prada and Louis Vuitton. Prada opened its biggest boutique in the Middle East in Dubai Mall at the end of 2012. The Apparel Group signed a 10-year agreement with the Children’s Place to open stores across the UAE, Kuwait, Qatar, Oman, and Bahrain. Following the successful Saudi Arabia launch of F&F (the fashion line of Tesco), Wal-Mart announced it would expand its George fashion label to the Middle East in its

9 Population statistics are from the Population Reference Bureau. INTERNATIONAL COUNCIL OF SHOPPING CENTERS 18 5 RETAIL PROPERTY INSIGHTS VOL. 20, NO. 2, 2013

Asda stores, in a partnership with Beirut-based Azadea Group. One store has already opened in the emirate of Sharjah, with a second planned for May in Amman. In Abu Dhabi, where famous cultural names such as the

Louvre, Guggenheim, and Sorbonne are planning to open branches, tourists and foreign residents are driving retail growth. Major investments in infrastructure, universities, arts, and cultural events are taking place, and consumers are demonstrating an appetite for luxury concepts. The scheduled 2013 openings of Yas Mall and The Galleria, in addition to planned developments such as Sowwah Central and The District, promise to draw top designer brands such as Dolce & Gabbana, Miu Miu, and Cartier, along with famous food and beverage outlets such as Armani Café. Bloomingdale’s has announced plans to open a store in Abu Dhabi, and Yves Saint Laurent recently formed a joint venture with Al Tayer and plans to open an Abu Dhabi flagship in 2013.

Sub-Saharan Africa Sub-Saharan Africa is getting a closer look from

regional and global wholesalers and retailers seeking high- growth opportunities. The population is young (one-third is between 10 and 24 years old) and fast-growing (2.4% per year, second fastest in the world), and GDP has grown steadily as well. It is also urbanizing rapidly, with a burgeoning middle class and growing discretionary incomes creating growth momentum. Web and mobile connections have also spread rapidly. At the same time, the region has unique and challenging obstacles: a largely underdeveloped infrastructure, which makes building a sustainable supply chain difficult; heavy economic dependence on agricultural production; and price-sensitive consumers and high inflation that have slowed the advance of modern retail. Botswana and Namibia are ranked in this year’s GRDI,

but the region as a whole bears watching. For example, Ethiopia is a rising retail market, exemplified by recent growth and news reports that Wal-Mart (already present in 12 other Sub-Saharan Africa countries) has negotiated with the government to enter the market. Ethiopia has a large population—roughly 87 million, second in Africa only to Nigeria (170 million) and ahead of Egypt (82 million), Democratic Republic of the Congo (69 million), and South Africa (51 million)—and it is growing 3.5% per year.9 More than half of the population is under 24 years old, and the middle class has grown to 15% of the population. The country is urbanizing as more people seek shelter and jobs in city areas, and increasing per-capita wealth is creating a surge in modern grocery. Even as the market remains

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