By Staff writer
New Knight Frank report says UAE continues to attract shoppers and retailers alike from around the globe
Tourism growth and increases in population and income levels all point to a positive outlook for the UAE's retail sector, according to a new report by Knight Frank.
Its UAE Retail Focus Autumn 2015 report said the UAE continues to attract shoppers and retailers alike from around the globe.
It added that recent development in the retail sector in Dubai has seen the focus shifted towards niche community centres, in addition to mall expansions where developers are counting on a better market positioning and a larger catchment.
Recent expansion projects at the Mall of the Emirates and Dubai Mall, and the announcement of the 80 million square foot Mall of the World, has emphasised the continued thrive of super-regional shopping malls as well as the high confidence held by developers on the potential growth, Knight Frank said.
Matthew Dadd, head of retail at Knight Frank UAE said: "Though retail supply per capita in the UAE is one of the highest in the world, the market is still performing well and has a lot of potential over the next decade.
"Growth in the non-oil economy, particularly the tourism sector, the increase of population and income and the upcoming international events (ie Expo 2020) are all pointing to a positive outlook for the retail sector in the UAE."
Forecasts from the IMF indicate that the UAE's non-oil economy will grow by 3.4 percent in 2015 and 4.6 percent by 2020, outperforming many countries around the globe, while population, on the other hand, is expected to grow by 20 percent by 2020.
Dubai and Abu Dhabi are also strengthening their tourism profile by continuing to develop tourism attractions and enhancing the country connectivity. Dubai International Airport overtook London Heathrow as the world's busiest airport with 70 million passengers while Abu Dhabi handled over 20 million passengers in 2014.
The report said that although accounting for only 12 percent of total retail supply in Dubai, mid-market community centres have been a growing segment.
It added that having currently 80 percent of its retail space within super regional malls, Abu Dhabi has seen a massive change in retail format since 2012 when super regional malls didn't exist.
The emirate is relying on its growing population and tourism offering to drive retail spending up, Knight Frank said.
Dadd added: "The UAE has cemented its position as the preeminent shopping destination in the region. Shopping among locals and GCC visitors is a popular leisure activity in its own right and both Dubai and Abu Dhabi have responded to the evolving regional demand by expanding their retail offering and enhancing entertainment attractions."
Diaa Noufal, MENA research at Knight Frank, said: "Local mall developers are keen to keep up with the growing demand by attracting new brands to the market, while international retailers are eying the UAE as their next shop address due to the country's economic resilience compared to the waning global economy."For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.