With new malls open and even more scheduled for completion, is Abu Dhabi finally ready to flex its retail muscle? Abu Dhabi Week asks the experts

Whenever friends travel overseas they always ask whether they can bring something back home: a particular brand of face cream or perhaps the latest handbag or pair of designer heels? In truth it’s hard to think of something that you can’t get here in the UAE. We’re spoilt for choice when it comes to malls, big international brands and the latest designs from Europe and the US, even if you still have to drive up to Dubai for some of them.

Yes, sadly, despite a growing number of brands stretching their legs in Abu Dhabi at Mushrif Mall, Marina Mall, Abu Dhabi Mall and Al Wahda Mall, we’ve still yet to see the variety of international retail on offer in Dubai reflected in the malls here in Abu Dhabi.

This could all be about to change though, according to the experts, as all eyes begin to shift towards our fair Emirate.

“The UAE in general is seen as a strong retail environment, but there isn’t really scope to expand any further in Dubai. The scope in Abu Dhabi is huge,” says CBRE Richard Ellis’s associate director Matthew Jay. “You only have to drive around downtown to see that the major retailers are underrepresented here.

“Abu Dhabi is where these retailers see the growth within the UAE, particularly with the new malls that are coming online.”
Vipen Sethi, CEO, Landmark Group certainly agrees: “As a retailer, we are excited about all these new malls. I strongly believe that the size of the (proverbial) pie is growing exponentially and there is a great potential for all mall developments to be successful, if they find the right tenant mix.”

Those malls that have already opened include Abu Dhabi’s largest mega shopping destination Dalma Mall out in Mussaffah and Mushrif Mall, which started welcoming customers just a few weeks ago. Brands, many of them new to Abu Dhabi, already open in these malls include: retail giants Sharaf DG and Eros, high street fashion hard hitter New Look, Matalan, Hotel Chocolat, Frederick’s of Hollywood, Lindex, Novo, Blend, Blanco, Fiorangelo, Paperchase and Red Star.

Sharaf DG’s managing director, Yasser Sharaf is quick to highlight Abu Dhabi’s potential: “On the island itself, we want to open another couple of stores [apart from our stores at Abu Dhabi Mall and Mushrif Mall] and we are currently in the process of looking at locations.

“Of course, we also want to expand on the mainland as well and there are a number of new malls recently opened or opening soon that look very promising.”

Landmark too is committed to an aggressive expansion plan, says its CEO: “Considering Abu Dhabi to be an exciting retail destination for the future, the Landmark Group is opening several of its home-grown concepts across leading malls in the Emirate,” says Sethi.

“The Group will open its entire portfolio of brands – Centrepoint, Home Centre, Max, Q Home Décor, etc, encompassing a 280,000-square-foot retail area in Yas Mall. Our new concept, Candelite, a sweets and snack store, which sources products from over 19 countries, has also just opened at Mushrif Mall.”

According to property experts Knight Frank, in the next two years another nine retail centres are expected to open for business across the Emirate – taking Abu Dhabi’s retail space from its current total of 1.62 million square metres to two million by the end of 2012.

New malls planned include Etihad Towers Mall opposite Emirates Palace, Nation Towers Mall on the Corniche (next to The Hilton Abu Dhabi), Boutik at Sun & Sky Towers and Paragon Bay on Al Reem Island, 9712 BMC Mall, the Al Wahda Mall extension, Bawabat Al Sharq in Bani Yas, The Galleria on Sowwah Square and Deerfields Town Centre in Al Bahia. All of these are expected to complete in 2012, with Yas Mall scheduled for its soft opening in 2013.

“The additional supply coming up will give retailers more choices,” says Priscilla Goh, development consultancy and research, Knight Frank. “Rents will also soften, which may attract new brands. However, in the end, the types of retailers that come into Abu Dhabi would depend on the malls’ strategies on tenant mix.”

According to Goh this largely depends on who the target market for the malls is; the tenant mix and by extension the food and leisure options are all selected accordingly to ensure each mall a steady footfall.

“In terms of a business trend, the immediate benefit to Landmark Group as a key tenant would be the correction in the rental lease rates,” says Landmark’s Sethi. “A wider reach across Abu Dhabi’s developing areas also means that several malls will cater to communities and there will be a more aggressive focus on acquiring customers and growing footfall.”

Abu Dhabi’s existing malls on the island, up to this point in time, seem to have done a grand job of answering residents’ demand with high occupancies (as high as 98 percent in some cases) and rents remaining constant. However, this situation could only continue while quality retail space was still under-supplied and Abu Dhabi’s shoppers still largely opted for their trusted high street retailers, generally clustered into areas around the city by trade.

With the new malls coming online that situation is about to change drastically.

“Shopping behaviour will be split into Western brands in shopping malls and local retailers providing specialist services in the high street clusters,” says Knight Frank’s Goh.

“As for existing malls, they will need to reposition themselves, undergo refurbishment or change their tenant mix to match the market in order tostay competitive.”

The million dirham question is, are Abu Dhabi’s resident’s ready to change their shopping habits? Is there really a demand for Western style malls in the city?

“Existing malls in Abu Dhabi, compared with Dubai, have a local feel about them and that’s reflected in the tenant mix,” says CBRE’s Jay.

“There’s a section of Abu Dhabi’s rapidly expanding resident mix that simply doesn’t have their shopping needs catered to, and at the moment these people are still voting with their feet and shopping in Dubai.

“I’m not saying that new malls need to be exclusively western in their outlook, but I think mall owners need to focus on getting as many international brands in as possible, following a varied tenant mix model, such as you see in Western Europe, more like Mall of the Emirates and Dubai Mall here in the UAE.”

Landmark’s Sethi is keen to temper that statement: “Traditional souks and other forms of ‘high-street’ retail outlets do offer a unique charm and character to Abu Dhabi.

“While mega malls and community malls are set to open across various locations in the Emirate, we are sure that the residents of Abu Dhabi will continue to also enjoy shopping along the high-street.

“However, going forward, like every multinational retail market, there is bound to be a shift from high-street shopping to malls, which offers a complete shopping, entertainment and leisure destination for the entire family.”

So which of the new mall developments should we be looking out for? According to CBRE’s Jay, his money is on those malls stepping away from Abu Dhabi’s more traditional retail focus.

“Aldar’s luxury Central Market scheme – The Emporium – is going to bring brands that haven’t been seen in Abu Dhabi before or even in the UAE before, as in the case of House of Fraser,” says Jay.

“I also think the likes of Mushrif, the Al Wahda Mall extension and Yas Mall – when it’s finally complete – as well as the existing Dalma Mall, all have the potential to be very successful if they can adopt more of an international model.”

Dalma Mall is already working hard to achieve that winning balance of tenants. As the Emirate’s largest retail space – with a built-up area of 250,000 sq m and a gross leasable area of 152,000 sq m – the potential for the mall to pull in the big brands is huge.

Rashid Doleh, executive director, Dalma Mall says: “The benefits of the current status of the mall is that it allows the mall management the flexibility to work together with retailers to provide the optimum space and locations to best suit each brand. This will result in creating an unrivalled shopping experience for our customer.

“The Mall is currently over 60 percent leased and has a total capacity for over 400 retail outlets. Amongst many others, Dalma Mall is delighted to welcome Marks and Spencers and Toys R Us later this year, following the opening earlier this year of Damas Jewellers, Abu Dhabi’s largest Cineplex operated by CineRoyal and Yogen Früz (frozen yogurt concept from Canada).”

Overall, the prospects for Abu Dhabi’s rapidly emerging retail scene are pretty positive it seems, with most experts agreeing that although the city’s current retail offering may not be as diverse as many resident’s would like, the plans are in place to rapidly change that situation.

“I think, in terms of being a market that has discerning customers, Abu Dhabi has already caught up with Dubai,” says Landmark’s Sethi. “One now also sees shopping events and promotions that the tourism authorities seem to have created. Dubai has showcased beautifully what the true potential of the sector is, and Abu Dhabi is weaving its independent identity as a global business destination.

“Retail is bound to grow in the next three years and we will see the Emirate come into its own as a retail destination.”

Megan Wynes

New malls already open …

• Dalma Mall in Mussaffah
• Mushrif Mall on Airport Road
• Mazayad Mall at Mohammed Bin Zayed City
• Mall openings before end of 2012
• Etihad Towers Mall near Corniche
• Nation Towers Mall on Corniche
• Boutik at Sun & Sky Towers on Al Reem Island
• Paragon Bay on Al Reem Island
• 9712 BMC Mall near Mussafah
• Al Wahda Mall extension
• Bawabat Al Sharq at Bani Yas
• The Galleria on Sowwah Square
• Deerfields Town Centre in Al Bahia

 

Brands to look out for …

• Waitrose Supermarket – Sun & Sky Tower on Al Reem Island and Al Zeina at Al Raha Beach
• House of Fraser, Pandora Jewelleryand Fat Burger – Emporium at The Central Market
• Sharaf DG and Eros, New Look, Hotel Chocolat, Frederick’s of Hollywood, Lindex, Novo, Blend, Blanco, Fiorangelo, Paperchase, Candelite and Red Star – Mushrif Mall
• Matalan, Marks & Spencer andToys R Us – Dalma Mall