Retail sales to grow an average of 3.2% every year to 2020: Savills
Dubai has the biggest and the best malls in the world and as the emirate gets ready to host Expo 2020, the retail spend is set to grow further.
From Dubai Mall, one the largest in the world, to Mall of the Emirates, one with an indoor ski slope, retail offering is the best in the world.
Savills, a global real estate advisor, has confirmed it, saying “Dubai has the best retail offer in the world, outperforming both London and New York.”
In its Global Retail Destination Index 2016, it states that based on the number of retailers present, their variety, brand positioning and the presence of top luxury and apparel brands, the emirate outperforms all other major global retail destinations.
Besides, the city tops for the highest retail spend, with $13,800 being spent in its shops for every one of its inhabitants during 2015.
“This is set to grow over the next four years, with retail sales growth projected to grow an average of 3.2 per cent every year to 2020 – the largest growth projection across all the cities examined,” the report states.
“This increase is set to be driven by a forecast 3.5 per cent increase in Dubai’s resident population and a 9.7 per cent rise in international overnight visitors per year, with the latter predicted to increase the amount they spend in Dubai’s shops by 11.5 per cent,” it adds.
Best store mix
In a survey of over 1,500 retailers, Dubai was also ranked as having the best variety of stores and retail mix, with 88 per cent of store managers saying that they were satisfied or very satisfied with the choice available, and came second, after London’s West End, as the best place to trade with 93 per cent of respondents stating that they would recommend it.
Marie Hickey, Director, Savills Research, said: “Dubai may be a comparatively new retail destination compared to some of the others we looked at, but the sheer variety of shops on offer and prevalence of luxury brands pushes it right to the top of our retail offer ranking.
“The city is set to continue to draw international visitors, for whom shopping is likely to be at the top of their ‘to do’ lists, but retailers did score it lower than most of its competitors on its cultural appeal and ease of access, so these may be areas for the Dubai authorities to consider if they want to further strengthen its attraction to international shoppers.”
Strong retail segment
JLL, a property consultancy, said in its first quarter 2016 report that average retail rents remained flat during the first three months of 2016 as occupancy rates remained unchanged at 92 per cent, showing the strength of the retail segment.
“Developer sentiment remains positive and we expect to see further completions over the remainder of the year including the Dubai Mall – Phase 2 and the Outlet Village.”
With more projects entering the market, retailers will continue to have greater choice. However, the consultancy, states as some of the new projects may try to charge higher rents, larger retailers could crowd out smaller and mid-sized tenants who will be forced to consider more secondary locations with lower levels of turnover and footfall.
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