In recent times, Abu Dhabi has shed its quiet persona in favour of glistening infrastructure that shows off its potential as a leading investment destination.
Being noticed the world over as a centre for culture, entertainment and leisure, the emirate is stepping up its game in terms of the retail opportunities on offer to cater to a growing population and increasing visitor numbers. According to real estate services firm CBRE, Abu Dhabi ranks tenth in the world for retail space under development, ahead even of Dubai.
“The UAE remains a competitive option for international retailers, with Abu Dhabi in particular seeing significant new retail space under development, as it looks to establish itself as a major destination for leisure and shopping,” says Mat Green, Head of Research and Consultancy UAE, CBRE Middle East.
Average retail rental rates for Abu Dhabi stood at $71 (around Dh260) per square foot per year, according to a report by CBRE. Property consultant JLL estimates that more than 600,000 square metres of new retail gross leased area (GLA) is expected to enter the capital’s market by 2017. By the end of next year, total retail space across Abu Dhabi is expected to reach 2.6 million square metres of GLA.
The second half of last year saw the launch of three new malls: The Galleria, a luxury complex on Al Maryah Island; The Mall at World Trade Centre; and Deerfields Townsquare, located outside the city in Al Bahia.
Tourism proposition
This relentless retail onslaught has been building for some time now, and in 2012 the Abu Dhabi Tourism and Culture Authority created a dedicated industry development committee to drive the retail sector in the emirate. The committee, comprising representatives of 14 leading retail operations, was tasked with identifying issues impacting the industry and finding ways to integrate the sector with the overall tourism proposition.
With the emirate waking up to the fact that retail plays a key role in enhancing visitor experience, the shopping and entertainment options have improved vastly across the capital.
Strong brand association, solid household consumption and modern retail concepts coupled with a flourishing tourism sector are some of the key factors driving the capital’s retail sector.
According to JLL’s Q4 2013 Abu Dhabi Real Estate Overview report, delivery of office and retail space for the remainder of this year is expected to grow by 16 per cent and 20 per cent respectively, with 507,000 square metres of office space and 388,000 square metres of retail space due to be added to existing stock by the end of the year. The report also states that 22,000 residential units were expected to be delivered in Abu Dhabi this year, a 10 per cent increase year-on-year, bringing the total number of units in the emirate to 240,000.
The game changers
Apart from a burgeoning realty scene, where retail is doing outstandingly well, another key factor driving retailer interest in mall locations in Abu Dhabi is the need to seek untapped sources. Established brands and emerging labels now see Abu Dhabi as the logical place to seek higher numbers when looking for organic growth within the UAE.
The recently opened LuLu Hypermarket in Capital Mall is a new entrant in Abu Dhabi’s retail scene. Billed as the biggest hypermarket in Abu Dhabi, the 230,000-square-foot store is spread over two levels, has a department store, a children’s entertainment venue and multiple food and beverage (F&B) options.
Yusuffali M.A., Managing Director of the LuLu Group, is quoted in a media release as saying at the time of launch that: “This is our group’s biggest hypermarket yet and truly represents our high standards of quality. While all our stores follow the strictest standards in terms of store fittings, hygiene and food safety regulations, this hypermarket will set new benchmarks for the retail industry of the region.”
The Galleria, which opened last year at Sowwah Square, adds to the city’s growing luxury quotient. Bringing more than 50 new fashion labels and several new F&B brands to the capital for the first time, the mall covers three levels, with 33,000 square metres of retail space. Designed to attract high-end shoppers and wealthy tourists, it houses brands such as Louis Vuitton, Cartier, Prada, Bulgari, Dior, Fendi, Ralph Lauren and Diane von Furstenberg.
Following the opening of The Galleria, Aldar Properties launched the World Trade Center Mall in the Old Central Market area. The mall includes mid to premium retail, dining and entertainment outlets, and more than 160 shops, 20 dining outlets, an eight-screen cinema and several external landscaped terraces. But its crown jewel is the British department store House of Fraser, which makes its regional debut at the mall.
Later this year, expect the launch of Aldar Properties’ Yas Mall, which at 2.5 million square feet, is expected to be the second-largest mall in the UAE after The Dubai Mall. Opening to coincide with the final race of the 2014 FIA Formula One World Championship, Yas Mall is expected to bring never-before-seen leisure and entertainment facilities to the emirate.
