Kippreport investigates if oil prices aren’t the only cause for the market slumpAugust 27, 2015 12:00
From ‘bling’ to bargain basement
Dubai retailers are expected to drop their obsession with luxury, and start to offer goods at more competitive prices.
April 5, 2010 3:57 by kippreport
But despite the predicted increase in spending, it is unlikely that this will keep pace with the planned expansion of Dubai’s retail space.
As Jean-Herve Bouyer, CEO of Aswaq Management Services in Abu Dhabi, told Trends magazine this month, annual consumer spending in the Middle East rose from $1,600 in 2004 to $3,200 in 2008 – but this needs to reach $7,000 to sustain all the retail real estate projects slated to come on the market in Dubai this year.
Admittedly, many of the planned retail developments will be delayed. And that could be seen as a good thing.
Bouyer told Trends that the average gross leasable area per capita (the area of retail property that can be rented to sell goods) in stabilized urban markets is 14 sq ft. But in the US, the average area is 21 sq ft, which is considered the absolutely maximum for a market. But there will be 24.7 sq ft of leasable retail space per capita in Dubai, if all the retail developments scheduled for this year do actually open – which is anything but sustainable.
One of the most remarkable new retail developments is Mall of Arabia, which in its early planning stages was conceived as the world’s largest mall. There are doubts that this will be ready on schedule. But even if it is only delayed by a couple of years, if consumer spending does not rise fast, there may be more bargains around than anyone expected.
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