1 Abu Dhabi Mall 2 Dubai Mall 3 Sunset Mall, Dubai 4 Cairo Festival City
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In terms of available mall space we don’t see much room for another scheme in Dubai, at least not for the next couple of years. It depends on what’s happening with the population as this affects retail
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in destinations where there are already five or six malls within a few kilometres of one another may not be as sig- nificant in terms of size, the surrounding catchment area etc., and certainly some of the larger fashion brands will need to see malls over a certain size for them to actually considering trading there.” The retail rental outlook also remains in the hands
The inherent medium-term growth potential of many emerging markets remains a key strategic magnet, helped by the fact that in some cases these markets have as yet only been targeted by relatively few inter- national brands. “Finding suitable real estate is a common barrier to
entering a new market, and we are finding that the opening of new retail space and shopping centres are key triggers for international retailers considering a move into particular new markets. The current decrease in the development pipeline is likely to restrict the opportunities for retailers to expand further over the coming years.” Where Europe has previously dominated the list of top
retail cities, Asia and Middle East now account for almost half of the top 20 most international markets in the new report. A number of Middle Eastern cities have made sig- nificant progress in the global hierarchy, moving sharply up the ranking. Notably, Riyadh (from 25th (26th
to 14th to 15th ) and Kuwait City (28th to 17th ). The growth in Jeddah and Riyadh is partly spurred
by the government’s aggressive development plans as well as domestic spending patterns. “Retailers are also focusing very heavily on the Saudi market. The popu- lation there is significant, even though the per capita
), Jeddah
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spend is not as high as other destinations in the region. There is very little retail there at present, and both Jeddah and Riyadh are a starting point,” said Leighton and Jay. The prevalence and popularity of destination malls in the
region is also shaping retailer trends according to Leighton and Jay, who said: “Retailers are looking at all opportunities at the moment, their attitude towards retail has changed. They are a lot more cautious and will run intensive due diligence before they take on any opportunity. “You have got to look at the holistic view. With Dubai
they will go to a signature mall like the Dubai Mall as prin- ciples will be saying to franchise operators, why aren’t we there? They have to be there. Whereas smaller malls
of the tenants according to CB Richard Ellis with incen- tivised deals and elastic pricing structures in place. “The key thing is flexibility. Landlords need to be a bit flexible in the current market bearing in mind what’s happening globally. As we come out of the recession it is still a tenants market, whereas previously it was a landlords market and this flexibility needs to remain going forward,” remarked Leighton and Jay. And local developers are also expanding their retail
empires. Majid Al Futtaim Group, the Dubai-based developer which already operates 10 malls across the MENA region, recently announced plans to invest US$3.5 billion in four new malls for the Middle East. The new shopping centres will be built in Cairo, Beirut,
Fujairah (UAE) and close to Damascus, with scheduled completion dates of 2014. “Shopping malls are important infrastructure for
modern living in the MENA region,” said Peter Wal- ichnowski, CEO Majid Al Futtaim Properties. “Our experience has shown that not only do shopping
malls drive footfall and sales for our retail partners, but also significantly contribute to the local economy of each mall. They help to enhance the value of the surrounding real estate, boost long term employment and provide significant new opportunities for small businesses.”
jun-sep 2010
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