By Andy Sambidge
New report reveals that eight percent of international retail brands are looking to open stores in Gulf countries this year
Saudi Arabia and the UAE are the most popular destinations in the Middle East for retailers looking to expand into new international markets, according to a new report.
CBRE's 'How Active are Retailers Globally' report revealed that eight percent of international retailers are looking to open new stores in the two Gulf countries this year.
Both Gulf nations were ranked 27th globally in a list that named Germany as the most popular retail market to enter.
It also ranked Kuwait and Qatar joint 42nd, with four percent of retailers looking to enter the markets this year.
Bahrain was ranked 56th, with two percent of retailers keen to open new stores, while Oman was placed joint 60th, with just one percent of retailers looking to enter its retail market.
The report said international expansion remains high on the agenda for retailers in 2015, in spite of uncertain economic prospects and cost escalation.
It said 47 percent of retailers surveyed indicated that unclear economic prospects and cost escalation, largely due to increases in rental costs and lack of quality retail space, are the biggest concerns for 2015.
However, despite these challenges appetite for international expansion remains a strong focus as retailers continue to invest in their store network throughout 2015.
The new research from global property advisor CBRE revealed that Germany has retained its number one position for the second consecutive year as the most popular retail market in the world with 40 percent of retailers planning to open a store there in 2015.
Germany was closely followed by the UK with 33 percent and France with 31 percent of retailers.
Nick Maclean, managing director, CBRE Middle East, said: "A young and rapidly growing population, strong economic fundamentals, growing disposable incomes and an increasing demand for international brands is driving the growth of the retail sector in Saudi Arabia. Expectedly, Saudi Arabia remains on the radar for international retailers looking to gain a strong foothold in the GCC region."
The report said the physical store remains the destination of choice for consumers as retailers continue to open stores in diverse locations with 21 percent of retailers planning to open between one to five stores in the Europe, Middle East and Africa (EMEA) region by the end of the year.
Large scale expansion plans with retailers looking to open more than 40 stores has scaled back to 9 percent in 2015.