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Tue 15 Jul 2014 11:32 AM

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Mall games: Why the Gulf is once again defying global trends

Malls are dying out in the US, but Mall of the World shows they are getting going here, says Neil Halligan

Mall games: Why the Gulf is once again defying global trends

An article in The Guardian newspaper last month appeared with a headline ‘The death of the American mall’.

The stark statement explained that while malls were once proud visions of suburban utopia, some have been left to rot, as online shopping and the resurgence of city centres make malls increasingly irrelevant to young people.

The accompanying pictures underlined the grim nature of how malls in certain areas of the US have declined into empty shells.

Phil McArthur, founder and managing director of shopping centre specialists McArthur + Company, said this week that it was a reflection of underlying economic conditions in those areas.

“About ten percent of the malls in the US have failed due to changes in the economic conditions in their catchment,” he said.

“If you look at the former industrial areas like Cleveland and Detroit, they used to have robust employment. When the dynamics change, and the industry started moving out of the area, then the retail couldn’t be supported,” he explained.

And so, when the article in Guardian spoke about the decline of malls in the US, it wasn’t necessarily a precursor of what to expect in Dubai in the decades to come, and that’s for two important reasons. The first is that the prosperity of Dubai’s inhabitants, and the UAE in general, remains exceptionally strong.

The second is, as Karl Nader, Principal at Strategy&, formerly Booz & Company explained, that while the idea of malls here may have been developed based on the US model, they’re altogether different when placed in the GCC marketplace.

“In the GCC you don’t have natural shopping districts. If you go around the world – Paris, New York, Miami, or Milan – there are natural shopping districts, in the middle of cities,” Nader explained.

“It doesn’t exist in the GCC and this is why people need to create these eco systems to attract the traffic accordingly.”

And in taking the original concept of the mall – a collection of stores and restaurants in one large development – Dubai has completely transformed that into destination malls.

And in Mall of the World, it will redefine malls even further. Not only do they plan to build the largest shopping mall in the world, but also the biggest indoor city with its own attractions.

While it’s completely mindboggling, if it comes to fruition (there’s a history of projects being delayed in the UAE that can’t be ignored), it will totally transform the city once more.

Will it happen? What will ultimately stall progress is funding and for a project like this, it’s going to need lots of it.

But for now, the headlines are all about Mall of the World. The first phase, which will focus on the mall aspect of the development, is expected to be completed within three years, with tenders due to be released in about six months.

The next chapter in Dubai’s economic growth has just begun and once again the emirate is defying trends seen in the West.

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