The Retail Edit Hub - The Rise of Retail in the Middle East
The retail market in the Middle East has seen a growth rate like no other and now plays a key part in not only attracting visitors and investors to the region but also in supporting economic growth. While the retail market in the Middle East is still in its emerging/growth stages retail investors, whether international or domestic, are particularly drawn to the region. This is due to a proven stability within the market, which is rare in emerging markets, heightened opportunities for retailers to expand and a lack of competition against local established brands which together creates a very desirable market.
Not only are retailers recognising that their presence in this market is vital but also that Middle Eastern consumers themselves are particularly valuable to their global operations. We are now seeing brands, luxury in particular, adapting their offering in order to attract consumers in the region. For example global player D&G recently introduced abayas into their collection and luxury retailer Jimmy Choo has just launched an exclusive Middle East collection, strategies we are seeing to better target this valuable market. Luxury retail is an area in particular that provides extensive opportunities to international investors as the region is home to many wealthy consumers and has in turn dedicated it’s time to designing retail offerings that perfectly cater to this demographic.
The Middle Eastern markets are actively striving to create new opportunities for retailers and new experiences for consumers in order to fuel an already burgeoning growth rate.
Dubai is now perceived as a global shopping destination with a second place ranking for international brand presence and its sights set on becoming the number one shopping destination in the world. With a growing economy and population, booming tourism, rising salaries together with a wealth of ultra-rich consumers, there is no doubt that the market is every retail investors dream. In a recent report Dubai was named the top city for consumer confidence, which has evidently been reflected in its influx of new retail projects, with an expected 361,127 square meters of mall space under way. In Dubai’s bid to become the number one shopping destination it is now designing retail spaces to encompass a ‘real city’ experience in order to compete with cultural fashion hubs such as London and Paris. With Dubai being the chosen city to house Expo 2020, the demand for retail offerings will dramatically increase and in turn spark the need for even more new projects that will exhibit Dubai as the world’s ultimate retail hub.
Growth is just as evident in Abu Dhabi’s retail market with an anticipated 63,000 square meters of retail space expected by the end of this year. In addition to this, a couple of one billion dollar projects are in the pipeline, Reem Mall and Al Maryah, set to be finished by 2018. It is clear that Abu Dhabi anticipates investors to enter and expand in their market due to the rising demand for retail experiences sparked from increasing purchasing power coupled with a growing population. The region not only expects a rise in retail investment but forecasts more tourism in turn setting a multibillion dollar airport expansion project in motion which will house even more retail space.
Outside of the UAE we are also seeing the retail landscape shift dramatically particularly in Qatar. Qatar’s retail sector is transforming rapidly and is expected to be worth $284.5 billion by 2018 making it one of the top most attractive markets for retail investors. With the highest per-capita income in the world and a fast growing population, retailers are realising the importance of having a presence in this market, particularly for luxury brands. Qatar is now paving the way for investors to enter the region through its drastic retail expansions with one million square meters of retail space to be created over the over the next few years. The region is not only enticing investors but also investing themselves, in H1 of this year we saw Qatari organisations acquire two global luxury players, Balmain and Corneliani alongside investing into UK giant BHS, these bold moves illustrate Qatar’s growing retail presence on a truly global scale.
Bahrain is also seeing huge growth across its retail sector; earlier this year the Wadi Al Sail complex comprising of 38,000 square meters of retail space opened its doors. The region is also increasing its efforts to cater to the rise in Saudi weekend visitors by developing new projects that will create more 5 star hotels in order to encourage more premium tourists to extend their retail experiences.
Other markets such as Saudi and Oman are witnessing the potential in neighboring regions and are increasing their efforts to attract investors. Very recently we saw Saudi adjusting its policies to allow international investors 100% ownership of their retail operations in a bid to entice brands to expand their operations into the market. Oman on the other hand has experienced a rise in retail space over recent years, with a growth rate of 7% since 2011 and a rise in GDP by 4.6% the region has become very attractive; retail conglomerate Majid Al Futtaim is already investing millions. In terms of a market with huge potential, retailers are eagerly waiting for the sanctions to be lifted in Iran as investors predict to see a retail boom.
Retail is evidently becoming a rapidly growing market in the Middle East with a vast amount of opportunities for retailers who are entering or expanding within the market. This growth has in turn created new opportunities for retail professionals within the region and for those looking to further their career in the Middle East market. The retail sector in the Middle East secured second across the top performing industries in the latest Job Index with a 32% growth in job offerings. These results illustrate the exciting stages the market is currently experiencing and in turn a variety of opportunities that Carter Murray Retail can present to industry professionals.