"These markets will continue to grow and be the preferred entry into the new region for new products and brands. As such, growth remains positive for retailers especially in the UAE [United Arab Emirates] and Saudi markets," he said.
According to a survey conducted amongst leading retailers and retailing groups in the MENA region, 93% of the retailers are expecting a market recovery in the next 6 to 24 months, which shows optimism among retailers.
Colliers' retail survey indicated a positive outlook amongst retailers on the business environment over the next 12 to 24 months. The retailers developed an increased awareness of consumer attitudes and purchasing attitudes during the economic downturn. Therefore, brands that fail to perform in a given market will be shut down and replaced with new products/brands that are closer aligned to consumer demand in terms of both need and price point.
Gissing added that retail houses and shopping centres are looking at introducing product mixes that are more aligned to the new specific-demand consumer. Hence developers will need to further look into the demand for specific retail products.
In Dubai, retail space is taking shape in a few different forms — strip boulevards, business tower podiums, etc. The report stated that 2010 and 2011 would be characterised by residential community-oriented malls, with the exception of Mirdiff City Centre, while 2013 is expected to see a reinvigoration of the destination shopping mall concept with the first phase of Mall of Arabia in Dubailand.
The shopping mall supply in Dubai will increase by 30% between 2011 and end 2013, with an oversupply expected by over one million sq m of gross lettable area in 2013. However, the demand rate is calculated based on Dubai nationals and residents and does not take tourist demand into account.
Meanwhile, the retail sector in Abu Dhabi is supported by stronger spending power of UAE nationals and is therefore less dependent on tourist spending than Dubai. In 2009, out of the US$5.2 billion (RM16.17 billion) retail spending in the Emirates, its citizens spent US$2.2 billion while tourists spent US$600 million and non-citizens spent the balance.
The report added that in terms of retail sector outlook, a sustained and significant improvement in job creation and income growth would translate into increased retail sales volumes.
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