GCC Retail Fast Growth
The organised retail space in the Gulf Cooperation Council countries will top six million square metres by 2007, says a study by Retail International, an independent retail consultancy offering specialist professional services to the industry.
The findings were published in Retail International’s Review of the Year from a pan-regional survey of 250 shopping centres.
Simon Thomson, an authority on the region’s retail and mall operations and owner of Retail International and a founding member of the Middle East Council of Shopping Centres (MECSC), said: “In the longer term, we project that organised retail footage across the GCC could reach 15 to 16 million sq m within the next 10 years.”
“Given rising demographic forecasts across the region a further five million square metres or so on top of that already completed or well on its way, may in the end turn out to be a conservative forecast.”
The findings are published as the MECSC prepares for its annual convention on March 19 and 20. The two-day leasing fair, trade expo and conference will see some of the region’s leading retail real estate developers come together to showcase new mixed use retail projects and network at Hall 4 of the Dubai International Exhibition Centre.
Mike Davidson, president for the MECSC, said: “Retail is becoming a major contributor to gross domestic product (GDP) for a number of Arab countries, particularly in the GCC. The forum provides the ideal opportunity for the industry, retailers, analysts and other interested parties to see the scope for retail in the region.”
The UAE and Dubai in particular will continue to dominate in the regional retail real estate arena, where Dubai accounts for approximately 1000 sq m for every 1000 people or more than 50 percent of retail space across the country.
Saudi Arabia’s retail scene is gaining momentum, with the capital, Riyadh and the Red Sea port of Jeddah operating between 700,000 to 800,000 sq m respectively. With Riyadh’s population estimated to treble to 15 million people within the next 10 years, the scope for the Kingdom’s retail scene is yet to be realised.
Davidson continued: “The growth of national populations and influx of expatriates have made for a viable industry, while the continued growth of regional and international inbound tourism, plus the region’s general tax free status, all makes for an enticing choice of destinations, and a lucrative opportunity for retail brands.”
The region has witnessed a greater influx of international brands during 2006, with more scheduled to enter the market in 2007. This is despite a reported 22 per cent increase in retail rent over the previous 12 months, which equates to around $98 per sq m per month.
With a number of new malls scheduled to open during 2007, existing malls are undergoing massive redevelopment and remodelling, firstly to attract new brands, and also to maintain footfall.
Davidson continued: “The Levant and Egypt are also providing an interesting case study, with huge Gulf investment being funnelled towards retail development, particularly in Lebanon and Syria. However North Africa has also seen its fair share of growth in the retail, with Egypt receiving an estimated $1.9 billion investment by Al Futtaim Group, part of which will go towards a 140,000 sq m retail park.”
The 2006 survey states that the GCC region currently enjoys 5.5 million sq m of retail space, with another 4.5 million under development. There is room for a probable additional 2 million sq m, with the reasonable potential for an extra 3.5 million on top of that.
The full survey can be downloaded free from the Retail International website at www.retailinternational.co.uk -TradeArabia News Service
The findings were published in Retail International’s Review of the Year from a pan-regional survey of 250 shopping centres.
Simon Thomson, an authority on the region’s retail and mall operations and owner of Retail International and a founding member of the Middle East Council of Shopping Centres (MECSC), said: “In the longer term, we project that organised retail footage across the GCC could reach 15 to 16 million sq m within the next 10 years.”
“Given rising demographic forecasts across the region a further five million square metres or so on top of that already completed or well on its way, may in the end turn out to be a conservative forecast.”
The findings are published as the MECSC prepares for its annual convention on March 19 and 20. The two-day leasing fair, trade expo and conference will see some of the region’s leading retail real estate developers come together to showcase new mixed use retail projects and network at Hall 4 of the Dubai International Exhibition Centre.
Mike Davidson, president for the MECSC, said: “Retail is becoming a major contributor to gross domestic product (GDP) for a number of Arab countries, particularly in the GCC. The forum provides the ideal opportunity for the industry, retailers, analysts and other interested parties to see the scope for retail in the region.”
The UAE and Dubai in particular will continue to dominate in the regional retail real estate arena, where Dubai accounts for approximately 1000 sq m for every 1000 people or more than 50 percent of retail space across the country.
Saudi Arabia’s retail scene is gaining momentum, with the capital, Riyadh and the Red Sea port of Jeddah operating between 700,000 to 800,000 sq m respectively. With Riyadh’s population estimated to treble to 15 million people within the next 10 years, the scope for the Kingdom’s retail scene is yet to be realised.
Davidson continued: “The growth of national populations and influx of expatriates have made for a viable industry, while the continued growth of regional and international inbound tourism, plus the region’s general tax free status, all makes for an enticing choice of destinations, and a lucrative opportunity for retail brands.”
The region has witnessed a greater influx of international brands during 2006, with more scheduled to enter the market in 2007. This is despite a reported 22 per cent increase in retail rent over the previous 12 months, which equates to around $98 per sq m per month.
With a number of new malls scheduled to open during 2007, existing malls are undergoing massive redevelopment and remodelling, firstly to attract new brands, and also to maintain footfall.
Davidson continued: “The Levant and Egypt are also providing an interesting case study, with huge Gulf investment being funnelled towards retail development, particularly in Lebanon and Syria. However North Africa has also seen its fair share of growth in the retail, with Egypt receiving an estimated $1.9 billion investment by Al Futtaim Group, part of which will go towards a 140,000 sq m retail park.”
The 2006 survey states that the GCC region currently enjoys 5.5 million sq m of retail space, with another 4.5 million under development. There is room for a probable additional 2 million sq m, with the reasonable potential for an extra 3.5 million on top of that.
The full survey can be downloaded free from the Retail International website at www.retailinternational.co.uk -TradeArabia News Service
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