The UAE remains an attractive option for international retailers despite high rents in the market, said a CBRE Research report.
Average retail rental rates for Dubai was $114 per square feet per annum while Abu Dhabi’s rents stood at $71 square feet.
“Retailers continue to expand into this region, often using Dubai as their ‘launch’ platform into other markets such as Doha, Riyadh and Jeddah,” said Mat Green, head of research and consultancy UAE, CBRE Middle East.
According to CBRE, 25 new retailers opened stores in Dubai last year.
Dubai’s retail sector witnessed aggressive growth during the first half of the year with a number of secondary malls being launched.
Earlier this week, Dubai-based developer Majid Al Futtaim announced that the Mall of the Emirates will undertake a massive redevelopment project, worth Dhs1 billion. The project, called Evolution 2015, will include the launch of new shopping, dining and entertainment concepts.
Green said that a young population, strong brand association, solid household consumption and modern retail concepts coupled with a flourishing tourism sector continue to provide ideal conditions for retail growth in the country.
“Abu Dhabi in particular is seeing significant new retail space under development, as it looks to establish itself as a major destination for leisure and shopping,” said Green.
He said that new retail outlets such as the recently opened The Galleria, and the soon to be opened Yas Mall are helping to increase the emirates’ exposure, bringing new brands and concepts to the region.
Abu Dhabi’s retail space is expected to expand as The Mall at World Trade Centre and Deerfields Townsquare opens this year.
Green said that the UAE remains an attractive destination for international retailers due to the presence of international brands in the region and its relative affordability compared to other global retail markets.
“The emirates in many ways holds an edge over other established cities as it offers access to significant consumer numbers, high quality mall facilities, and cost sensitive rents even within prime centres.”