Dubai's retail sector continues to face challenges caused by increasing supply.
Dubai’s Position In Global Retail
- The potential for further growth in Dubai’s prime retail market continues to be significant despite recent weakness in the global luxury retail market. * Lease rates for prime retail property in Dubai are significantly lower than those in key global retail hubs including London, New York, and Hong Kong, despite the exceptionally high overnight international visitor spend seen by the city.
- According to the MasterCard Destination Index international overnight visitor spend reached $28.5 billion in 2016 more than double the figures are seen in cities such as Paris, Singapore and Hong Kong.
- Dubai also hosts a large number of high-net-worth individuals, visibly higher than cities such as Miami and Milan.
- Dubai’s potential for further growth as a luxury retail city is likely to be recognised by global brands in the near term as the number of new entrants into the market increase.
Key Trends
Experience-Based Retail
- Cityland Mall is expected to be completed in Q4 2018 and will be a ‘nature-inspired’ shopping destination.
- Nakheel’s Deira Mall will feature a 1km retractable glass atrium
Integrating Retail and Residential
- The number of integrated developments that offer a mix of retail and residential units is increasing given that they increase an area's marketability and are seen to grow ‘communities’ thus attracting a higher number of retailers and creating a self-sustaining development.
Retailers Choosing to Go Green
- Shopping malls are increasingly looking at methods of increasing their energy efficiency and reducing overall energy consumption through the implementation of green practices and reducing waste.
- For example, Mall of the Emirates has completed the first phase of a solar photovoltaic (PV) plant that is expected to generate 3GWh of clean energy and save AED1.4 million on energy costs every year. City Centre Me’aisem and My City Centre Al Barsha are also examples of retail developments that have solar panels in order to increase sustainability.
Mid-Market vs. Luxury Retailers
- Although the luxury sector has seen a slight slowdown over the past few years, consumers are shifting towards mid-market brands.
