By Andy Sambidge
New EC Harris report puts Qatar, the UAE and Saudi Arabia in top 15 out of 48 major retail hubs
Three Gulf states have cemented their position among the world's leading retail markets as they become some of the most attractive countries for retailers to expand into, according to EC Harris in its second annual global retail study.
The Retail International Programme Expansion Index, which ranks 48 major international retail markets, placed the Qatar, the UAE and Saudi Arabia among the top 13 positions in the list.
The index ranks cities according to five factors that have a major impact on successful retail expansion, including quality of infrastructure; capability of the construction supply chain; legal framework; quality of project delivery and business environment.
Qatar was named the top Middle East market and was ranked seventh globally, up from 11th last year while the UAE was ranked 11th, up four places from the previous year.
Saudi Arabia's retail market was also prominent in the list, ranking 13th globally, EC Harris said.
"With high end retail developments in the UAE and across the Middle East becoming increasingly more attractive for both residents and visitors from around the world, the industry is now one of the most important sources of economic growth in the region," the EC Harris report said.
"Due to a reputation for efficient project delivery and ease of transition, Middle Eastern markets are proving increasingly attractive to international retailers. This is set to continue and the future will no doubt see the market become a strong contender to Western markets which currently remain the most desirable," it added.
The list was topped by the UK, followed by The Netherlands, Germany, Canada, and Taiwan. France, Japan, the US and Australia rounded out the top 10 while Romania, Pakistan, Nigeria, Argentina and Russia were named the worst performers.
Chris Seymour, head of property, UAE at EC Harris, said: "Retailers are increasingly seeing the benefits of expanding their businesses into the UAE and other Middle Eastern markets with their strong consumer base, high levels of wealth and established construction market.
"Successful retail expansion in the Middle East as a whole relies heavily on the pace of delivery of major programmes and a high quality store end product.
"The region's ability to access and retain the best programme capabilities both in terms of supply chain and project delivery is a source of competitive advantage for the Middle East as it will allow retailers to mitigate risk and reputational damage. Each of these factors will enable the Middle East to cement its position as a global retail hub."
In September, CBRE said in a report that despite rising rents the UAE remains a competitive option for international retailers.
Average retail rental rates for Dubai stood at $114 per sq ft per annum and in Abu Dhabi at $71 per sq ft per annum, CBRE said in a report.
The study said international retailers were continuing to flood into the region with Dubai being used as a launch pad. According to CBRE research, 25 new retailers opened stores in Dubai last year.