Abu Dhabi has more than 0.8 million sq m of new retail space under development, placing the UAE capital amongst the leading cities globally for shopping centre development, said a report.
Across the world, an unprecedented 32 million sq m of shopping centre space is currently under construction, representing a 15 per cent increase year-on-year compared to 28 million sq m last year, according to the latest research from global property advisor CBRE.
Commenting on the Abu Dhabi market, Mat Green, the head of research at UAE, CBRE Middle East, said: “After a period of significant undersupply, where many of the major malls have been running at close to 100 per cent occupancy, we are now entering into a new growth period for retail stock.”
“Over the next four years around 0.8 million sq m of new mall space across nine schemes will be delivered to the market, helping to establish Abu Dhabi as a new destination for retail in the Middle East,” stated Green.
“During this period we will see a dramatic transformation of the retail landscape, both in terms of supply and quality. We are also expecting an influx of new retail brands, some of which will be opening their first stores in the region. Overall, we see this is an exciting time for retail in the capital,” he added.
According to the report, shopping centre development activity is heavily concentrated in emerging markets, with China home to more than half of all the space under construction (16.8 million sq m).
Seven of the 10 most active development markets globally are in China. These include Chengdu (2.9 million sq m) and Tianjin (2.1 million sq m), with Shenyang, Chongqing, Wuhan, Guangzhou and Hangzhou due to deliver over one million sq m over the next three years, it stated.
Other markets experiencing substantial expansion include Istanbul, Moscow, St Petersburg, New Delhi, Kiev, Hanoi and Kuala Lumpur.
The rapid growth of new shopping centre development in emerging, as opposed to ‘mature’, markets is attributed to a growing middle class, the urbanisation of large cities and consumer demand for better quality retail, said the report.
Retailers, including many from western Europe and North America, are competing to take advantage of these new opportunities.
Across Europe, shopping centre development in 2012 increased by 10 per cent year-on-year to 1.71 million sq m; however, a large proportion (72 per cent) was in Eastern Europe.
Istanbul was the most active European development market last year with the opening of seven new centres, including Marmara Park (94,000 sq m) and Trump Towers (41,000 sq m). Istanbul will be the most active development market in coming years with 32 centres currently under construction.
Europe’s other highly active development market is Russia which, like Turkey, is benefiting from strong economic growth and rising incomes.
In St. Petersburg, new residential areas supported by enhanced road and rail links are driving shopping centre development, with 0.5 million sq m under construction, said the CBRE report.
Moscow has the largest development pipeline, with 815,000 sq m due to open over the next two to three years. In neighbouring Ukraine, Kiev has 445,000 sq m under construction in eight centres, making it the fourth most active development market in Europe, and attracted a record 40 new international retailers last year, it stated.
Neville Moss, the head of EMEA retail research, CBRE, said, "The fact that a substantial majority of new shopping centre development in Europe is within its emerging markets is hugely significant. Prime space is in short supply in mature markets and retailers are increasingly turning to these emerging, but increasingly promising, alternatives."
“However, cross-border retailers continue to seek prime space and much of the new space in emerging markets is in peripheral areas of the large cities, appealing only to local retailers. In many cities, the mismatch between demand and supply has led to increasingly high rents in prime areas and high vacancies elsewhere," remarked Moss.
“Another feature of both mature and emerging markets is that the proportion of mixed-use is increasing. Larger shopping centres of the future will incorporate major leisure attractions and other uses to create a more appealing customer experience and meet the challenge of online retailing,” he added.-TradeArabia News Service