Too many malls spoil the retail environment
What’s your shopping favourite mall in Dubai? There are certainly more than enough of them to go round, if you ask Kipp. And experts agree.
December 20, 2010 3:43 by Samuel Potter
Kipp has pointed out more than once that having more retail space per thousand people than even the most mature retail market on earth might not be a sustainable proposition. Now our views have been added some credibility (for once) by a Colliers International report released on Sunday.
“The Dubai and Abu Dhabi markets remain upbeat — the former for its established position as a global retail platform and entry point for international brands into the region, … the latter for its forthcoming supply of retail space and strong domestic consumer purchasing power,” Colliers said.
“Demand is picking up, people are feeling more confident in their positions,” Stuart Gissing, regional director of Colliers International, told Reuters. “But that doesn’t say that it’s going to return to the joyous days of three years ago. The oversupply in Dubai will see a rebalancing in the type of products that existing developments are providing.”
Ah, there’s the word we were after: “Oversupply”. Gissing said that because of it, retail rents are likely to remain suppressed. “You will not find any escalation in rents, for new stock coming online there will be softer packages offered by developers,” he said.
Oversupply or not, we can’t deny that right now, malls are busy. Perhaps it’s because Christmas is just around the corner, and though a Muslim country, the UAE is home to hundreds of thousands of expats who will be celebrating. The traditional Christmas giving of presents and the large family meals enjoyed have cash registers ringing.
In last week’s poll, Kipp asked readers about their favourite mall. (Disclaimer: This one was a bit Dubai-centric, since a majority of our readers are based in the Emirate.)
Romping home with almost a third of the vote, 33 percent, was the biggest and brightest: Dubai Mall, at the foot of the Burj Khalifa. It stomped all over its rivals, and the only one able to get close was the former biggest mall, Mall of the Emirates, which scooped 26 percent of the votes. The newest arrival, Mirdiff City Centre, grabbed a respectable 10 percent of votes but couldn’t beat Deira City Centre to the third spot (12 percent). (Kipp loves to have old-school Dubai readers.) Ibn Battuta and Festival City limp home with a mere 7 percent each, while the wooden spoon goes to Burjuman.
But here’s Kipp’s point: With so many malls, the vote is spread and very few of them get an impressive score. We didn’t even include all the malls in the Emirate, as we don’t have space; what will happen to the retail picture if more malls are opened? And at least one more mega-outlet is on the way (Mall of Arabia).
The bottom line is, right now there aren’t enough Kipp readers to go round, and there won’t be enough customers in Dubai for these malls, either.