International retailers wait for change in ownership laws

28 January 2010

Gulf markets currently require local partners

More international retailers would be prepared to enter Middle East markets if they were able to come in as 100 per cent owners, according to research by UK real estate firm CB Richard Ellis.

Mark Morris Jones, director of retail at CB Richard Ellis, says that retailers currently not present in the region would rather enter the market on an owner-operator model, in preference to the current model of franchising or working with a local partner. But local laws in some parts of the Middle East mean that foreign companies cannot wholly-own their local operations.

Global retailers prefer to be owner-operators because it allows them greater control of their brands. However, Jones believes that these large retailers will continue to monitor the situation in the Middle East, and will consider entering the market if the ownership regulations were to change.

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