With more than 1,200 retailers and 573,000 square metres of floor space, the opening of UAE developer Emaar Properties’ Dubai Mall on 4 November underlined the commitment of the emirate’s developers to retaining its reputation as a global shopping destination.

Dubai Mall is the latest centre to mix entertainment with shopping, hosting an enormous aquarium, ice rink and cinemas. In its first five days of business, Emaar recorded 60,000 visitors. But competitors remain bullish about the sector and say they are not worried about losing customers to the new mega-mall.

“Last week, the Dubai Mall opened but our footfall figures [visitor numbers] were still up by 22 per cent week on week,” says Graham Dreverman, group managing director of Nakheel Retail, which owns rival malls such as the Chinese-themed Dragon Mart at International City. Nakheel has plans for more than 100 shopping centres in Dubai in the long term.

“Year on year, footfall figures are up 32 per cent and sales are up 42 per cent,” says Dreverman. “When you consider what is happening in the rest of the world, and that the US declared its worst retail month since records started, there is a big differential.”

Dreverman says there are no plans to cut back on its planned mall projects. But he admits that the company will review timescales to make sure it gets the best deal as construction material prices fall.

“I am not at all concerned about over-building,” he says. “Consumers will work out where the good ones [malls] are. Opportunities come from such major cost corrections. When you see steel futures fall as much as they have in a single day, and the value of the euro fall, this enables firms to buy pieces of major plant and equipment at much lower prices.”

One project likely to be delayed is the doubling in size of Ibn Battuta Mall near Dubai Marina. Dreverman says Nakheel is considering delaying the main contract award to take advantage of falling costs. When completed, the $100m phase two will expand the gross leaseable area in the mall from 139,350 square metres to more than 280,000 sq m. “We are doubling the size,” says Dreverman. “It is in the middle of the region’s biggest growth corridor between Abu Dhabi and Dubai - 70,000 people are set to move into Discovery Gardens in the next few months.

Nakheel and Emaar are not the only companies with major ambitions in the sector. Local developer Ilyas & Mustafa Galadari Group is pushing ahead with its $817m Mall of Arabia in Dubailand. With 930,000 sq m of space to rent, the centre will have almost twice as much retail space as Dubai Mall, but procurement delays mean the project is running behind its original mid-2009 completion date, and it is not expec-ted to be completed until 2010 at the earliest.

Project delays

Meanwhile, Majid al-Futtaim (Maf) is busy constructing its $710m Mirdiff City Centre mall, set to open in November 2009. Despite delays caused by difficulties obtaining cement and municipality permissions, Maf insists that the mall will meet the November 30 2009 opening date.

“The project is behind the original programme,” Maf said in a recent project update briefing. “However, the adjusted programme confirms major tenant milestones can be achieved, as can completion by 30 November.”

All this new supply means more competition in the retail sector, meaning good design will be crucial when it comes to retaining shoppers, according to Dreverman. “People will become more selective as time goes on,” he says. “Access is a major issue and the surrounding road network is key. There has to be a simple logical design that takes people easily from car to shops and from the shops back to the car with their goods, plus plenty of food and drink. A mall must have the right retail brands, entertainment and leisure.”

In its fourth-quarter review, real estate consultant Colliers International says that oversupply will hit smaller, older malls hardest. “Smaller and older malls will be required to reposition themselves to appeal to specific market segments,” the report says.

Colliers argues that the larger malls with a strong mix of tenants and more leisure amenities will triumph and, given the amount of upgrade and new mega-mall building under way, the developers appear to agree.

Fast fact

The number of monthly visitors to Dubai’s Mall of the Emirates - 2 million