Retail growth 'to meet demand'

ABU DHABI // The emirate of Abu Dhabi will almost double its mall retail space in the next two years. The total amount of retail space in shopping centres will grow from about 700,000 square metres of gross leasable area (GLA) to 1.2 million sq metres, according to Robert Ziegler, the vice president of the Dubai-based consultancy firm A T Kearney. "That's a major growth," he said. "However, if the increase in tourism we're looking for comes, and population growth is as planned, we should be just on par." However, if the number of visitors slowed, there would be a slight oversupply, he said. Industry insiders say there is enough projected demand to keep registers ringing despite the global slowdown in spending. At least six shopping centres are scheduled to open in Abu Dhabi in the next three years, including Deerfields Town Square on the outskirts of the emirate in 2010 and the revamped Central Market, Abu Dhabi's old souk, expected in 2011. The GCC's retail sector is worth about Dh367 billion (US$100bn) and is the second-largest non-oil industry in the region. By next year, a massive 16.35 million sq metres of GLA is due for completion in the GCC, according to Retail International, a British consultancy firm. Bawadi Mall in Al Ain is the next shopping centre in the emirate to open its doors. The mall's Carrefour anchor store began operating in December and 60 per cent of its 400 shops will welcome customers on March 26, according to the general manager of the mall, Bashar Tamimi. He is expecting eight million visitors in the first year, with an average 20,000 people a day. Already, 7,000 people a day were visiting Carrefour, said Mr Tamimi. "Business in Al Ain has not been affected at all by the crisis," he said. "More than 90 per cent of businesses rely on residents, and these residents have not been affected. Their income is the same, and the population is increasing. We are optimistic." Hilal Raad, the operations manager in the UAE for the soap and fragrance chain Fruits and Passion, said his group's stores in Abu Dhabi were faring well compared with those in Dubai. The chain is opening an outlet in Bawadi Mall, and is seeking other locations in the emirate. "One shop is not enough for Abu Dhabi," he said. "It's doing well." While Dubai has seen a 25 per cent drop in retail sales so far this year, Abu Dhabi sales have dipped by only between 3 per cent and 4 per cent, according to Majid al Ghurair, the chairman of the Dubai Shopping Malls Group and president of BurJuman in Dubai. "Here [in Dubai], the competition is big," he said. "The choices are huge, between the hotel industry and the shopping malls. Lots of malls are coming online. But in Abu Dhabi, it's just starting." With major residential communities such as Reem Island and Al Raha emerging, residents would need convenient places to shop, said Mr Ziegler. "All these new developments, be they on Reem island or Lulu Island, they all need infrastructure. Retail is an important part of infrastructure, not just roads." Retail opportunities at some existing communities, such as Bani Yas, also are still untapped. The 150,000 sq metre mall in the Bawabat Al Sharq development would be the first retail project in the area, said Wael Tawil, the chief executive of the Bani Yas Investment and Development Company, the project's developer. The mall was scheduled to be ready in August next year, but the developers were pushing to open it earlier and benefit from lower construction prices, he said. Mr Tawil estimated the mall would see about 15,000 visitors a day. The mall was surrounded by communities with roughly 120,000 people, but this was expected to grow to 170,000 by next year, he said. "The catchment area and the economics are right for the project," Mr Tawil said. "We're not worried." aligaya@thenational.ae