United Arab Emirates developers and retailers are adding shopping mall space once again, powered by upcoming retail hub Abu Dhabi, but risks of oversupply are likely to persist, Colliers International said on Sunday.

'The Dubai and Abu Dhabi markets remain upbeat - the former for its established position as a global retail platform and entry point for international brands into the region, the latter for its forthcoming supply of retail space and strong domestic consumer purchasing power,' Colliers said in a report.

Dubai shopping mall space is expected to increase 30 per cent between 2010 and 2013, leading to an oversupply of more than one million sq m in 2013, the property consultancy said in a report.

'Demand is picking up, people are feeling more confident in their positions,' Stuart Gissing, regional director of Colliers International, told Reuters. 'But that doesn't say that it's going to return to the joyous days of three years ago.'

'The oversupply in Dubai will see a rebalancing in the type of products that existing developments are providing,' he said.

Dubai's debt woes have been weighing on the overall economic recovery of the UAE this year. Abu Dhabi, UAE's capital which holds most of its oil, fared better during the crisis.

'By 2015, Abu Dhabi will have almost a balanced retail supply to the demand dynamics, it has a healthy dynamics,' Gissing said.

Abu Dhabi retail area would reach around 609,690 sq m by the end of 2010, an increase of 55 per cent over 2009. Overall supply was likely to increase to 874,500 sq m in 2013 and almost 1.1 million sq m by 2015, the report said.

One of UAE's biggest retailers, Bin Hendi Enterprises, said this month it was optimistic about the country's recovery and predicted sales growth of 3 to 4 per cent this year.

'You will not find any escalation in rents, for new stock coming online there will be softer packages offered by developers,' Gissing said.-Reuters