Dubai projects serve growing retail demand
CBRE chief economist predicts demand for destination malls is expected to remain strong
Dubai’s drive to build more projects is being fuelled by growing retail demand.
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The demand for destination malls in Dubai is expected to remain strong in the medium term. This is underpinned by rising tourism, positive economic growth and continued inflow of capital, according to Matthew Green, chief economist at CBRE.
He expects some newly approved retail projects in the Palm Jumeirah area to meet growing needs for retail space, especially as ‘the Palm Jumeirah area is currently under served by retail.’
Green also added that the approved projects will help Nakheel to diversify its portfolio by creating incoming generating assets, providing long term stable revenue. But he also warns of a high degree of risk with the delivery of any major new mall in an already established market.
But there is a shift in retail trends which strengthens Dubai’s retail market. According to an earlier report, American retailers are the most global, with 73% being present in all three regions. This compares with 45% of retailers from Europe, Middle East and Africa (EMEA) and 26% of those from Asia Pacific.
Traditionally, Dubai and London have always been in the top retail city rankings, followed by New York, Paris and Hong Kong, which still hold global pulling power.
“Historically many US retailers have been reluctant to adopt the retail franchise model,” said Anthony Buono, CBRE’s executive managing director of Retail Services.
“But with emerging markets continuing to show greater prospects for growth than the US, retailers are readily adopting franchising as a near-term strategy, to make inroads into the Middle East, South America and Asia Pacific,” he added.
