24 November 2017

Dubai Retail – Community Lines

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Over the last 15 years Dubai has become a global hotspot for tourism welcoming over 14 million visitors a year from around the world. One of the main drivers for this has been the creation of its mall industry focused on shopping and F&B sector. An analysis of the shopping mall mix of Dubai reveals that majority of the gross leasable area resides in the super-regional mall and regional mall category, accounting for 77% of total supply.

A look into the supply mix of the United States reveals an opposite break-up to that of Dubai. In the United States, super-regional malls only account for 12% of total supply, where as in Dubai they account for 61%. In the US the bulk of the supply is skewed towards smaller size shopping malls (below 400,000 sqft) which caters to the resident population. This comparison is significant, because it highlights that for a country as a whole, it is domestic residential spending that drives the retail market and the structure of malls represent this spend; a factor that has thus far not been prevalent in Dubai.

We opine that as the economy continues to move towards domestic consumption and investment based; developers will capitalize on opportunities prevalent in the master planned communities of Dubai to offer a greater array of community centers and malls, making Dubai’s retail offerings more like that of international tier one cities.

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