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Abu Dhabi poised for shopping boom

Posted by vmsalama on April 23, 2008

By Vivian Salama

The National

Abu Dhabi’s retail industry could soon yield higher sales per capita than Dubai, with spending power in the emirate expected to surpass Dh7.34 billion (US$2bn) by next year, according to research by the property consultant, Colliers International. 

“The outlook for Abu Dhabi is bullish,” John Davis, the chief executive of Colliers, said yesterday at the Middle East Council of Shopping Centre’s (MECSC) annual convention.

Retail sales in Abu Dhabi must increase by 19 per cent for it to sustain its performance per capita, while sales in Dubai must grow at the rate of 35 per cent to achieve the same performance, partly due to the growth in tourist numbers.

Mr Davis said the gross leasable area (GLA) for retail space in the capital was expected to grow by 122 per cent within two years.

Malls account for almost 60 per cent of Abu Dhabi’s total retail GLA, with non-mall GLA representing less than 300,000 square metres. According to the Colliers data, the occupancy rate at malls across Abu Dhabi averages about 90 per cent, while the shopping centres in Dubai are all nearly full.

Several factors are expected to lure more brand names to Abu Dhabi in the coming years. Retailers pay considerably lower rents in the capital, with the average annual cost ranging from Dh3,486 to Dh5,505 per square metre at prime shopping centres such as Marina Mall, Abu Dhabi Mall and Al Wahda Mall. In Dubai, at Mall of the Emirates, Ibn Battuta Mall and Burjuman, rents range from Dh4,404 to Dh6,606.

“The spending power of the Abu Dhabi nationals is obviously very, very high, Mr Davis said. “You’ve also got companies like Etihad, for example, which are really working to bring people from around the world directly to Abu Dhabi, so that will have a positive impact on the retail sector as well.”

The major players in Abu Dhabi’s retail property sector, including Aldar and the National Investment Corporation (NIC), are actively pursuing ambitious new projects throughout the emirate. Several new malls will be opened in the capital in the next few years, including Dalma Mall, scheduled to open next year, as well as the Central Market, Deerfields, and phase III of Marina Mall, all scheduled for 2010.



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