Around a quarter of global retailers planning to expand this year are including the Middle East and North Africa (MENA) in their plans for new stores, according to a new report by property consultants CB Richard Ellis (CBRE).
CBRE’s report examined the attitudes and 2010 expansion plans of 220 leading retailers, based on interviews conducted over the summer of 2009.
The results show that 24 percent of retailers plan to include the MENA region in their expansion plans. The UAE was the focus of the majority of this interest, with around 80 percent of those looking to expand in the MENA region only considering the emirates as their favoured location.
The attraction of the UAE, believes Mark Morris Jones, director of retail at CB Richard Ellis Middle East, is that retailers are allowed 100 percent ownership in the emirates, unlike other parts of the Middle East and North Africa.
“Certain areas of the MENA region are such that you cannot come in with 100 percent ownership, as the local laws won’t allow it. Those brand owners that don’t franchise their outlets in the region, do so because they want to maintain absolute control as a matter of principle,” said Jones.
Retailers in the grocery and food and beverage sectors made up the majority of those showing interest in the MENA region, the report added.
Earlier this month, another CBRE report found that Dubai’s retail sector saw average rents plummeting 50 percent last year to an average of $744.50 per square metre per year.
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