Mauling over the details
With an ever increasing retail per capita rate, Abu Dhabi should be concerned about the quality and the quantity of malls it will soon host, thinks Eva Fernandes.
March 28, 2012 3:53 by kippreport
When you work on Kipp for as long as I have you begin to see patterns in the type of stories you write. I know the slant to take when reporting on restructuring deals, just as well as the angle I will be taking reporting on UAE telecos. And so when I read about Majid Al Futtaim (MAJ) scouting out a location for a ‘mega mall’ in Abu Dhabi-I knew very well where this article was headed. The article was rolling off my tongue; I could have written it with my hands tied behind my back. (Wouldn’t that be quite the sight?)
I’d probably start off commenting that Abu Dhabi is expected to see a tremendous increase in retail space over the next four years-with figures projected the increase to something close to 1.8 million square meters.
Then, I’d say with a figure that high, Abu Dhabi would soon have 1,690 square meters of shopping space per 1,000 residents beating Dubai’s current record of 1,385 square meters (the highest in the world). At that point I’d casually drop in the fact that Dubai significantly outstrips Europe (which boasts of 231 square meters per 1,000 people) and the USA which has a comparable 1,028 square meters of retail space per capita.
I’d lay out all the bulky numbers out there. Then, I’d probably put on my stuffy-know-it-all voice and judgmentally proclaim Dubai’s unsustainable oversupply of retail space should serve as a lesson for the capital. A lesson Abu Dhabi is keen to ignore, I’d snark…
But instead of taken that well trodden path, why not talk about the value malls can bring to a city. Merely shooting down a mall for the worry of oversupply can be a misguided critique. Perhaps it might be more useful to consider the potential attraction and draw factors the mall will have.
Here in Dubai, there are two malls that stand out from the rest because of the ‘attraction’ factor. Mall of the Emirates is known worldwide because of SkiDubai-the unending fascination some have with an artificial sky resort in the middle of a desert city escapes me, but it is something every tourist in Dubai end up visiting. In turn, the Dubai Fountains, the aquarium and the tallest building in the world are all reasons Dubai Mall will stay relevant for years to come. In fact, when Emaar was securing its debt restructuring deal, it used Dubai Mall as collateral.
And so perhaps the quality of the malls being built and the type of attractions they host is a serious question developers need to consider. A mall for a mall’s sake isn’t going to book retail space-no matter how high you peg rental rates. Here is hoping Abu Dhabi, on its mall building collision course, keeps it all in mind.