Valley of the Malls

Attracting regular shoppers from across the GCC and indeed from all over the world, it should come as no surprise that the wholesale and retail trade sector is the largest in Dubai’s economy. Surpassed only by London, the city earned the position as the second most popular retail destination globally in 2014 by CBRE. A.T. Kearney also ranks the UAE as the fourth most suitable market for expansion among international retailers, an environment defined by a strong and growing population, sustained economic growth, and continued political stability—all of which contribute to increased consumer and investor confidence and create a favorable retail development market, making it one of the most lucrative sectors for foreign investment.

Dubai’s robust economic indicators in other sectors and Emirati disposable incomes funnel directly back into retail. The tourism and hospitality industry enjoys high hotel occupancy rates (80% in 2013), with the anticipated influx of shoppers entering the Emirate ahead of the Dubai 2020 Expo is expected to be a further boon for retail; meanwhile, 66.4 million passengers passed through Dubai International Airport in 2013, up 14.6% YoY, along with a 6.3% YoY increase in freight volumes, contributing to a significant impact on duty free shopping; Dubai Duty Free is already the largest in the world in terms of sales, which exceeded $1.8 billion in 2013 showing a 11.4% YoY increase. A strong transportation sector with state-of-the-art logistics infrastructure ensure growing interest among trade firms to establish operations in the Emirate, evidenced by an increase in wholesale and retail trade license issuance by approximately 10% YoY in 2013, while new trade license issuance increased at an average of almost 8% per year between 2010 and 2013. Bank credit to the wholesale and retail trade sector jumped to 22.4% YoY in 2013 from 0.8% in 2012, with the sector accounting for 11.6% of total bank loans in 2013. The fact that Dubai is also home to 70% of the UAE’s population in the 20-39 year age bracket is another promising factor for retails trade sector growth, as is the rising GDP per capita. According to Emirates NBD, the sector recorded a share of 29.2% of total GDP in 2013, employing roughly 23% of Dubai’s workforce. In the same year, the retail sales turnover was estimated at $39.6 billion by A.T. Kearney. Conservative estimates by Emirates NBD forecast that the retail sales turnover will reach $55.7 billion over the next seven years, given an average 4.5-5.5% annual GDP growth through 2020.

MALL MADNESS

When it comes to international luxury brands, Dubai has it covered. Dubai Mall in Downtown Dubai is the world’s largest shopping mall in terms of GLA (350,000sqm), and boasts over 200 food and beverage outlets and 1,200 shops—just about every brand in the world—from couture labels like Chanel, Givenchy, Dior, Gucci, Alexander McQueen, Burberry, and Fendi, to young adult ready-to-wear like Guess and Diesel. Dubai Mall doesn’t stop with its sartorial offerings on the 440,000sqf fashion avenue—there are art galleries, cinemas, an ice rink, Dubai Aquarium and Underwater Zoo, an indoor traditional souq, and more. In 2013 the mall welcomed more than 75 million visitors, and is now undergoing another massive expansion, to increase the mall’s area by 1 million sqft in its first phase, paving the way for more than 100 million visitors annually.
Dubai’s second largest mall is the Mall of the Emirates, with a GLA 234,470sqm and total area of 600,000sqm. Located in Al Barsha, the decade-old multi-level mall is home to 560 international brands, more than 700 stores, 11 anchor stores, and the Middle East’s first indoor ski resort and snow park Ski Dubai. Mall of the Emirates retail offering includes Carrefour hypermarket, Centrepoint, Debenhams, Harvey Nichols, Home Centre, Jashanmal, Marks & Spencer’s, and outlets for fashion, books, stationery, toys, gifts, art, accessories, electronics, jewelry, watches, furniture, cosmetics, perfumes, and financial services. Mall of the Emirates is completing a major redevelopment project this year undertaken by owners Majid Al Futtaim Holding, which will introduce the UAE’s largest cinema ever built—a 24-screen VOX Cinemas entertainment complex, an additional 25,000sqm retail space, a new dining area for 10 restaurants and cafes, and 30 new stores including Italian leather brand Braccialini, the chic Parisian label Maje, and Molton Brown of London.

HIDDEN TREASURES

For shoppers searching for a bargain or something completely unique, venturing off the beaten path to Dubai’s winding traditional souks and hip boutiques is must. Vintage finds, one-of-a-kind textiles, jewelry, and crafts, as well as cutting edge local and Arab designers keep the retail market interesting for residents and visitors alike. Inspired by “Dubai’s hidden industrial areas,” fashion label KBT Koncept blurs the line between contemporary alternative trends and the traditional abaya, while Emirati designer Bint Thani embodies the fashion-forward it-girl popular with the city’s indie scene—just two examples of homegrown Arab fashion talent. For the foodie in Dubai, an alternative to the numerous supermarkets and hypermarkets is the Deira Fish Market—by far the cheapest place in Dubai to buy fresh fish. At Diera you can find hundreds of traders offering a huge variety of seafood and produce—freshly caught red snapper and whole squid is sold by the kilo, while sun-ripened tomatoes and juicy nectarines beckon from the farmers market. During the month of Ramadan, Ramadan Night Market at the Dubai World Trade Center offers a rich cultural experience for everyone, and a family fun environment for those breaking their fasts. Specialty items such as festive sweets, clothes, handicrafts, perfumes, and beauty products can be found in the vibrant atmosphere teaming with jugglers, balloon blowers, face painting, henna tattoos, Arabic coffee, and dates.

WHAT’S NEW?

With an already overwhelming array of shopping experiences fit for every consumer, Dubai is showing no signs of slowing down its retail development plans. According to Trade Arabia, leading developer Nahkeel issued its first tender for the new 3.6 million-sqf retail, dining, and entertainment hub at Al Khail Avenue in the Jumeirah Village Traingle. Scheduled to open in 2018, the project will be comprised of 350 shops including a supermarket, department stores, specialty outlets, a multi-screen cinema, entertainment zone, cafes and restaurants, and a 2 million sqft car park capable of accommodating 4,400 vehicles. Nakheel’s current and future retail projects boast over 10 million sqf of total gross leasable space, between its upcoming malls and souks in Palm Jumeirah, Deira Islands, Jumeirah Village, and Warsan Village, and its existing Dragon Mart and Ibn Battuta malls, as well as six neighborhood retail centers and communities across the Emirate. Dubai Holding also recently announced plans to build a temperature-controlled shopping zone called Mall of the World, which will dwarf the Emirate’s existing largest malls Dubai Mall and Mall of the Emirates, with its planned 4.5 million sqm and 743,000 sqm devoted to pedestrian shopping streets. The behemoth retail space will include hotels, a theme park, wellness district, and entertainment venues, planned for a 2020 opening.