Retail revolution

09 July 2004
Dubai Mall, the giant shopping complex being built at the heart of the UAE's commercial capital, will be the biggest and best in the world, according to developer Emaar Properties.
Dubai Mall, the giant shopping complex being built at the heart of the UAE's commercial capital, will be the biggest and best in the world, according to developer Emaar Properties.

The mall is planned to have a gross leasable area (GLA) of 560,000 square metres. Canada's West Edmonton Mall is the current world-beater at 490,000 square metres. Phase 1 of the Mall of America, which opened in Minneapolis in 1992 and is the biggest shopping centre in the US, is a mere 390,000 square metres by comparison.

Dubai Mall is part of a massive shopping complex construction programme that constitutes one of the biggest increases in floor space in retail history. Figures compiled by Retail International of the UK show that completed malls in the GCC have a total GLA of 3.8 million square metres, with less than 20 per cent of it in Dubai. Projects being built or planned could lift this figure to 9.4 million square metres by the end of the decade. The total investment will come close to $10,000 million.

In Dubai alone, five monster shopping projects are under way, including Dubai Mall. The Majid al-Futtaim Group's Mall of the Emirates will have slightly less shopping space but an indoor ski slope with real snow, while Mall of Arabia, part of Dubailand, could be the biggest of them all with a forecast GLA of 600,000 square metres. Gardens Mall is being developed on the Sheikh Zayed road close to Jebel Ali. Finally, Dubai Festival City, an integrated leisure and commercial scheme, is planned by Al-Futtaim Investments, part of the Abdullah al-Futtaim Group. It occupies a site on the Deira side of the Garhoud bridge overlooking Dubai lagoon and will have 250,000 square metres of retail GLA.

According to Retail International, more than 1.5 million square metres of GLA are now under construction in Dubai, almost three quarters of the total in the GCC.

The questions being asked across world retailing are, why the GCC and why now? The answer is simple: opportunity. The GCC has a growing population which is enjoying a boom in living standards. The UAE population grew by 8 per cent in 2004. Average per capita national income is around $20,000 a year and the GCC average is probably in excess of $10,000 - low by European standards, but more than double that of any other part of the Middle East. With about 10 million people living in affluent households, Retail International forecasts that up to one quarter of gross domestic product (GDP) will be spent in UAE malls by the end of this decade.

Social change is having an effect. Younger women are much more confident about visiting public places than their mothers' generation, who preferred the privacy of the local store. Families make use of malls for social purposes, while teenagers find them a convivial and cool - literally as well as metaphorically - place to hang out on a hot summer's evening.

GCC developers are far less restricted by planning considerations than their European counterparts. Once a developer can make a project stand up economically, planning restrictions are rarely an obstruction.

Finally, retailing in the region is trying to catch up with the West. Until a decade ago, most purchases were made in baglalas, small and traditional stores that have charm and authenticity but lack practically everything else. Developers started building the first malls in the early 1990s. They were aimed both at meeting customer expectations and satisfying demand - from fashion retailers in particular - for an appropriate context for their products.

Speaking last month about Dubai Mall, Emaar chairman Mohammad Ali Alabbar referred to the huge demand for high-quality malls among GCC shoppers. 'Mall usage in the Middle East is 30 per cent higher than in the US and Europe,' he said. 'Per capita retail space in the US is 17 square feet. In the Far East, it is nine square feet, but in Dubai

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