Dubai has retained its position as the world’s second most important international shopping destination for the fourth consecutive year, closely behind London, according to the 2015 edition of the CBRE report: ‘How Global is the Business of Retail?’.
According to the latest edition of the report by the leading global property advisor, Dubai has a presence of 55.7 per cent of international retailers. Last year saw new international retail brands enter the Dubai market almost on a weekly basis, with 45 global brands entering the emirate’s already bustling retail mix.
Some of the high profile retailers that entered the Dubai market in 2014 included Hollister, Cavalli Caffe and McQ Alexander McQueen opening outlets in the emirate.
The findings of the report confirm that despite a drop in global oil prices, Dubai’s retail sector – one of its primary economic growth engines – has continued to dominate the global rankings thanks to the emirate’s competitive shopping offerings for its residents and tourists alike.
“Dubai’s retail sector has remained resilient over the past few years, with major retail centres recording occupancies of over 95 per cent and rising footfall figures,” the CBRE report states.
The report highlights the factors that continue to propel Dubai among the very top in the global retail standing.
“Dubai’s success has been driven in part by the overall quality of its developed infrastructure, and a combination of factors ranging from the ease of travel, visa availability, air flight connections and hotel quality,” it notes.
“Dubai Chamber welcomes news that the city has retained its position as the second most important international shopping destination globally for the fourth consecutive year. Dubai’s retail sector is vibrant and continues to be driven by strong economic growth, increased consumer spending and tourist arrivals, which hit a record high of 13.2 million last year,” said Hamad Buamim, President and CEO, Dubai Chamber of Commerce & Industry.
“Dubai provides a wide range of opportunities for foreign retailers and brands, whether that is individual stores or franchise options. The quality of available retail space is an added incentive for global retailers looking for expansion and key projects, such as Mall of the World promise a healthy future outlook. Dubai Chamber supports the retail sector through various initiatives and activities and as the voice of the business community we will continue to facilitate growth and developments in this important sector,” Buamim added.
“Middle East shows no signs of abating with focus on Abu Dhabi and Dubai. With some of the biggest shopping malls on the planet, the environment for expansion in the Middle East remains attractive with well-established franchise partners and templates for how to proceed being in place,” the report says, suggesting that growth will continue.
Retailer globalisation remained a key theme with half of the 164 cities surveyed attracting at least five new retailers. Markedly, Abu Dhabi featured prominently on the list of target cities with 55 new brands, ranking the emirate in third place for new retail entrants during 2014. Tokyo took the coveted top spot with 63 new retailers entering the market followed by Singapore.
International retailers continue to flock to Dubai as customers – both residents and tourists - see value in Dubai’s shopping, which is among the cheapest in the world. “Sustained consumer demand from both the local population and visitors from across the Middle East, Europe, Asia and beyond has been instrumental in the growth of the retail sector,” the report confirms.
Overall, the report highlights that even as Dubai has retained the Number 2 spot as a magnet for international retailers for four consecutive years, this year is going to be even better with more international brands making a beeline to add to the emirate’s retail offerings.
“The rise in tourist numbers along with the planned festive activities for 2015 will see another strong year for the retail sector. With strong fundamentals, the sector is expected to see further growth with the addition of new retail brands waiting to enter the market,” it states.
Globally, only London (57.9 per cent global retailers present in the city) is ranked above Dubai (55.7 per cent global retailer presence), with the other, more established cities following the emirate in terms of international retailer presence. Shanghai (53.4 per cent) and New York (46.3 per cent) are next in line, with jointly ranked Singapore and Moscow (46 per cent each) making up the rest of the top five international cities for retail representation.
These cities are followed by Hong Kong (44.7 per cent), Paris (44 per cent), Tokyo (43.4 per cent) and Beijing (41.7 per cent) make up the remaining Top 10.
The traditional retail triumvirate of London, Paris and New York continue to be challenged and in some cases overtaken by cities from Asia Pacific and the Middle East, the report notes, adding that this trend is likely to continue and there will be a day when we see a new number one atop the overall retail penetration rankings.
“The growth of Dubai’s tourism sector over the past decade has been nothing short of phenomenal as visitor numbers have increased exponentially from around 5.4 million in 2004 to over 11.6 million in 2014,” it states.
“The role of the retail market has been pivotal in this success with the Emirates becoming synonymous with high-end retailing, offering unrivalled exposure to luxury products and placed second only to London in overall brand coverage globally,” the report notes.
“Dubai’s global air connectivity and its growing stature as a hub for trade between the East and West has clearly given an added impetus to the retail sector. Dubai continues to remain the clear destination of choice for the majority of the brands looking to enter the region for the first time, frequently using the emirate as a stepping stone to wider regional expansion programs,” said Nick Maclean, Managing Director, CBRE Middle East.
“Whilst Dubai has maintained its position for overall retail representation in 2014, the increased number of new retailer brands entering Abu Dhabi has been driven in part by a significant increase in supply in the capital amidst the opening of a number of new malls, most notably Yas Mall which opened in November 2014,” added Maclean.
Mid-range fashion retailers remained the most active sector globally and focused on targeting the European market. Whilst luxury and business fashion retailers continue to target the Americas and Asia Pacific region with 26 per cent of expansion into the Americas and 24 per cent in Asia, coming from this sector. Luxury retailers contributed more than one-fifth of new retail entrants to Asia Pacific last year.
“Dubai’s economic growth remains strong and it retains its position as a leading leisure and shopping destination in the world. The UAE retail sector will continue to see strong growth in 2015, driven by robust inbound tourist numbers and demand for new brands in the region, with almost all retailers using the UAE as a hub for their entry into the GCC. In addition, the UAE’s free-market economy, which makes it easy to do business in the country, will be a key driver of this growth,” said Ahmed Galal Ismail, CEO, Majid Al Futtaim Ventures.
Majid Al Futtaim owns and operates 17 shopping malls, 11 hotels and three mixed-use communities in the region. Its malls portfolio includes Mall of the Emirates and City Centre malls.
“We have witnessed high growth last year, and with our regional expansion plans, we remain committed to growing this further,” said Ismail.