Dubai’s large super-regional malls such as Dubai Mall and Mall of the Emirates will continue to dominate the retail space despite the launch of several other smaller retail projects across the emirate, said a Jones Lang LaSalle (JLL) study.
According to its Dubai retail market overview report, large super-regional centres constitute 66 per cent of the mall based retail space in the emirate and will continue to dominate the market in terms of footfall, sales volume, rental values and occupancy rates. The trend expected to continue in the coming years.
In an effort to tap into the retail boom in the emirate, two major malls will be launched in the second half of 2013 with as many as seven other malls to open in Dubai in the next two years.
Phase I of the Avenue by real estate developer Meraas and Phase II of Al Ghurair City will both be completed by the end of this year, adding 48,000 square metres of retail space to Dubai’s existing 2.8 million sq metres.
Other proposed retail projects include The Beach by Meraas, Phase II of Dragon Mart, Discovery Gardens Retail Center, The Outlet Village in Al Barsha and Jumeirah Park Community Center, all due for opening in 2014 while the Dubai Pearl Shopping Mall and the Agora Mall in Jumeirah are both scheduled for 2015.
The construction of the re-launched Nakheel Mall and Pointe Mall, both located on the Palm Jumeirah, is expected to begin soon.
Despite as many as seven shopping malls opening across Dubai in the next two years, it is yet to be seen if this will reduce the appeal of the bigger players like The Dubai Mall and Mall of the Emirates.
Keen to not lose out on the retail sector growth and to attract more visitors, older malls such as Deira City Centre and Burjuman Centre are revamping their facilities to compete with their glossier counterparts.
However any new entrant to the mall retail sector will face stiff competition from the major market players who have expansion plans of their own.
Dubai Mall announced an expansion of 93,000 square metres earlier this year with an aim to reach 100 million annual visitors; it’s door welcomed 20 million visitors in the first three months of this year. The expansion is to centre around the Fashion Avenue with the addition of new flagship stores from world renowned brands.
Mall of the Emirates (MOE) proprietor Majid al Futtaim Holding (MAF), announced earlier this year their plans to invest Dhs3 billion in their expansion plans.
MOE alone will undergo a Dhs930 million extension including a new Dhs100 million fashion district spanning 50,000 square feet and 30 new fashion stores in the initial stage.
The project, expected to be complete by 2013, involves a re-merchandising strategy that includes integrating existing and new contemporary fashion brands, the company said in a statement.
“We are experiencing 11 per cent growth in the number of people visiting our Dubai malls in 2013. There is an increasing number of major retailers wanting to open in our malls and we are witnessing a growing demand across all our businesses,” said Iyad Malas, CEO at MAF, in a media statement earlier this year.
“We are investing now to ensure that our facilities are enhanced and expanded in order to meet the future demand of our customers,” he added.
Other major malls with expansion plans include Al Ghurair Centre, Dubai Outlet Mall, Ibn Battuta Mall and Festival City, said the JLL report.
Though many secondary malls would be unable to attain a market share akin to the big players, they will definitely come as a relief as the retail space in primary malls are filling up quickly due to their popularity.
“With those centres becoming saturated, secondary malls might start to see some benefit in the coming months as retailers are unable to secure prime locations in the primary super regional centres,” said Andrew Williamson, head of retail at Jones Lang LaSalle MENA.
The report says that with a burgeoning resident population the community and neighbourhood malls have been performing well catering to the needs of the surrounding community. The business potential of such outlets cannot be entirely ruled out either.
Dubai developer Nakheel announced earlier this year that retail space in the new Discovery Gardens mall, slated to open next year, has been leased out.
More than 20 local and international brands have signed up for the community mall that would serve 24,000 homes in Nakheel’s Al Furjan, Discovery Gardens and The Gardens communities highlighting the commercial demand for such units.
Retail sector accounts for 12 per cent of Dubai’s GDP over the last ten years and continues to register growth owing to strong inbound tourist flow and an increasing number of residents.