Spending at Dubai malls owned by Majid Al Futtaim (MAF) is up 10 per cent as the Arab Spring and economic woes in Europe draw immigrants and tourists to the emirate.
“The Arab Spring has been positive for Dubai because a lot of Gulf-based people who used to go to Lebanon or Egypt have identified Dubai,” chief executive Iyad Malas told the Reuters Retail and Consumer Summit on Tuesday.
MAF, the franchisee for Carrefour hypermarkets in 19 countries and operator of 11 malls across the Middle East and North Africa, including 6 in the United Arab Emirates, expected to maintain double-digit revenue growth in 2012, he said.
Its Dubai retail tenants saw a 15 per cent increase in footfall in the first half and 10 per cent growth in sales, Malas said. “(In) Egypt… tourists are coming to see the Pyramids, the Nile. Few are going to shop. Whoever visits Dubai has at least two malls to visit.”
The emirate’s population has been swelled by people seeking refuge from political strife in the Middle East and economic malaise in Europe, which is also supporting retail sales.
“If you look at the profile of the people moving to Dubai it is people with money who are either worried about the political situation in places like Syria or Egypt or wherever it might be,” said Malas.
“There is new interest coming out of Italy, Spain and some of the southern European countries.”
Retail accounted for nearly a third of Dubai’s gross domestic product in 2011, with the emirate positioning itself as the shopping capital of the region a place to buy designer clothes, luxury watches, top-end cars and gold-plated mobile phones.
The global economic downturn in 2008 led to a drop in tourists visiting the emirate and dampened demand for luxury goods. “People with wealth were maybe a little bit scared at the beginning, but then continued to spend strongly,” Malas said.
MAF’s gross revenue was up 10 per cent in 2011 to 19.6 billion dirhams, while operating profit rose 19 per cent to about $750 million, said Malas, adding this year’s growth was likely to be similar.