By Soren Billing
Dubai apart, retail space in GCC still well below US average - Retail International.
There is still a market for new malls in the Gulf, with only Dubai consumers having access to the same amount of shopping that the average American does, new research on Wednesday suggested.
Barring Dubai, organised retail space in the region’s major cities is still well below the average US density of around 1.9 square metres gross leasable area (GLA) per person, according to research from retail consultancy Retail International.
Only Dubai is at parity with the US, with other cities in the Gulf notching up only half of what the typical American shopper has access to.
“Taking the GCC as a whole, the amount of new mall ‘footage’ under development is beginning to show signs of slowing as projects commenced during the boom years have been completed or are due for completion in the coming year, said director Simon Thomson.
Retail International’s latest yearly survey shows that 9.5 million square metres of mall Gross Leasable Area (GLA) has been completed in the Gulf, up from 7.75 million square metres a year ago.
The increase in retail space is almost identical to what it was in the previous 12 month period.
A further 4.3 million square metres is believed to be under development, down by 100,000 square metres from a year ago.
“Although only a small percentage, this equates to the reduction of a regional sized mall,” Thomson said.
Retail International estimates that there is an underlying potential in the longer term of around 5.9 million square metres, which if developed could bring the total GLA across the GCC to around 19.6 million square metres within the next 10 to 15 years.
However, the timing of these projects is now far less certain than it was 12 months ago, with some likely to be either deferred or shelved completely, Thomson added.
In the last nine years, almost 7.5 million square metres of retail space have been completed in the region.
“Without a return to the recent past boom conditions, a prospect currently looking so unlikely, such growth now seems unlikely to be repeated for years to come,” Thomson said.
Slowing tourism is also likely to have a negative effect on the sector, he said.
“With so much retail in Dubai predicated on tourism and its continued growth year on year an upheaval on such an unprecedented scale in the global economy is bound to have a significant knock on effect, with 37 percent of GDP in 2008 coming from the wholesale and retail sectors.”
I'm assuming that this is another marketing gimmick to boost confidence. Who is analyzing & writing such reports!! Over 55% of mall retailers are suffering or struggling to meet their ever increasing overheads, and the report is encouraging to build more malls!! Do we really need more marketing and leave the real issues tucked under our mattresses !! Why don't we face the Brutal Facts and do something !! and for a change, do something real !!
The US is so much cheaper than Dubai and you get better service and warranty!!!
Dubai's oversaturated with malls. And somehow I don't think Ras al Khaimah's quite ready for such a 20th century concept. Seriously, malls aren't anything special and I've no idea why people in the UAE seem to get so excited about the prospect of lots of shops next to each other. Instead of building more malls, how about attracting more shops full stop - useful ones which sell things that ordinary people need at prices ordinary people can afford. Not more 'luxury' stores selling diamond encrusted mobile phones for a billion dollars, somewhere you can buy clothes and shoes and food without needing a bank loan.
I am a showroom owner in prestigious Mall in Dubai and the business is seriously affected. It's very very low...the Dubai Malls market is now oversupplied and very competitive . In addition, the regional small demography and toursim is slowdown is not helping.! Construction of new Malls in other Emirates or GCC countries will reduce in substance the Dubai-Malls market share ... So please Mr consultants : consult the concerned people to know the reality.!
More malls that look the same, offer the same things and rip you off in the same manner? Thanks but no thanks, I dont frequent malls because i am neither a teenager, nor lonely nor depressed nor a shopaholic, besides I busy myself in far more constructive and healthy activities than loitering aimlessly and wasting precious hours of my life. Dubai needs to be more creative than this.
You really think matching the same numbers as the U.S. is a good thing? We have so many retailers shutting down here and malls are turning into ghost towns. People are starting to realize they don't want to walk around in a giant concrete structure lined with stores. It's really depressing.
Statistics needs to be compared with the closest comparsion, comparing US density of retail availibility to ME retail stock is ridiculous,dynamics of both markets are very different, much of the local market in majority GCC states are floating population while US population is largely local. I hope that the consultants reflects realistic picture in the future.
Notwithstanding the genuine concerns expressed below over current oversaturation and the apparent fixation on malls in the region I wonder whether these experts are again selectively interpreting statistics to give them the 'facts' they are looking for? Do their figures of 1.9sqm per person include every person currently resident or only those who realistically have any opportunity to spend money in an upmarket mall? Surely if they include the millions of labour camp residents then this is hardly a true 'apples with apples' comparison given the average purchasing potential of an american resident??
Mmmn. I think the 'experts' need to investigate this a bit further. It is fine banding figures around but really what they need to do is have some sort of demographics survey. Out of the population here, what percentage are labourers or people on a low income? Can they afford the latest fur coat or 'luxury' watch? No. Didn't think so. Malls here need to stop charging high rents and invite independent shops otherwise you will end up with the equivalent of clone towns like you have in the UK where it is the same shops in every town around the country. Factor in the cost of items here, around 40% more expensive than the UK plus poor customer service and consumer rights; why would you shop in the malls in Dubai apart from buying the essentials?
Seems that "the experts" cannot keep lower profile and shut up even in those difficult times. Why are institutions over here still spending money for consultancy, they just copy past information from the west and a small local flavor to the comments. For sure, this will make some valuable savings for other essential expenses which are sound. Retail prices here are far higher then in high labour and social expensive countries to whome they want us to be compared to.