Abu Dhabi's retail market has been undersupplied relative to potential demand, said Cluttons.
The city's two principal shopping malls — Marina Mall and Abu Dhabi Mall — are operating at 95%-100% occupancy, and about two thirds of Abu Dhabi's retail stock comprises "street shops".
The lack of good retail space has resulted in a loss of spending to other more retailed orientated cities in the region, particularly Dubai.
Cluttons believes that as well as alleviating pent up demand, the increase in supply will encourage residents to shop locally rather than travel to Dubai and be an added attraction for tourists.
Tourists presently account for less than 10% of total retail spending, and the number is projected to increase as Abu Dhabi transforms itself into an international destination.
The increasing supply of apartments and villas and the softening rents as well as the entry of more competitively priced office space will underpin demand for retail space, said Cluttons.
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