Sharjah’s retail sector has seen strong growth during the last few months due to the rising number of residents looking for affordable accommodation in the emirate.
Home to a large residential community, Sharjah’s rental rates are inextricably tied to its neighbour Dubai.
“The spike in rentals across Dubai has clearly benefitted Sharjah’s residential market with the emirate witnessing a sizeable influx of new tenants in the past 24 months,” said Mohammed Faheem, senior research analyst, CBRE Middle East.
“The rising population has clearly led to the growth of retail and community focused malls that cater to the growing needs of the population.”
Traditionally community malls have been the norm in the northern emirate with major mall developers eyeing a smaller stake in its retail market.
“Over the past few years retailers such as Majid Al Futtaim (MAF), through Sharjah Holding, and Al Safer Group, have opened up community retail centers to serve local residents,” said Faheem.
“Retailers have targeted areas that have a significant catchment of population, including Al Khan, Al Qasba, Juraina, Al Quoz and Muwailah.”
MAF recently announced a Dhs200 million expansion for Sharjah City Centre to tap into the northern emirate’s retail boom.
The redevelopment project will include an expansion of the mall’s retail space by an additional 13,500sqm of gross leasable area, making way for 28 new shopping and dining options. It will also host a new multi-screen cinema adding to its entertainment options.
Sharjah’s other major retail outlet Sahara Centre also increased its leasable area by 60 per cent in 2013 due to a rise in demand from retailers.
“Sahara Centre is witnessing a 40 per cent increase in traffic and a 50 per cent increase in sales compared to last year’s Dubai Shopping Festival (DSF),” said Pierre Semaan, marketing manager, Sahara Centre.
“Our demographic studies show us that 30 per cent of our shoppers come from Dubai, mostly from the Al Qusais, Mirdif and Mamzar areas. We do have tourists visiting Sahara Centre, with numbers up by 20 per cent on last year’s DSF.”
The rise in visitors to Sharjah malls is also driving new mega projects in the emirate.
MAF recently unveiled plans to launch a new shopping mall in the city called ‘Mall of Sharjah’. The project, which is slated for completion in the next four years, will be bigger than the current Sharjah City Centre, its executives said.
In an interview with Gulf Business last year, MAF CEO Iyad Malas said that the group has identified further opportunities for investment in Sharjah’s retail sector.
He emphasised that new mega malls have the ability to create communities around them and spur development.
“When Mall of the Emirates was built there was nothing around it in Barsha. Similarly when Mirdif City Centre opened, there were very little development but now that has changed,” said Malas.
“So people want to live around those neighbourhoods and we believe that this can be replicated in Sharjah through the new mall.”
Though the emirate is seeing a mega mall growth, Faheem said that the need of the hour is community malls.
“Whilst retail demand is growing amid a rising population, changing consumer trends, and high per capita income, demand is far more focused on meeting the immediate needs of the local community,” he said.
As well as driving its bigger mall investments, MAF has tapped into the potential of smaller malls in Sharjah.
“We have a joint venture with the government of Sharjah called Sharjah Holding and we have developed already five community centres there through this joint venture,” said Malas.
“These are working extremely well and they are anchored by a Carrefour supermarket and some other stores around them and it works very nicely, catering to the existing population.”