Gulf is set for a five year retail building bonanza

GCC shopping centre construction will rise by staggering 150%, according to report

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By  Sean Cronin Published  April 23, 2005

Shopping centre construction within the GCC is set for massive expansion over the next five years, according to a soon-to-be-published report. The latest figures from London-based research group Retail International will show that 2.5 million m2 of floor space is currently under construction in the region. By the year 2010, a further 4.5 million m2 could be added to total stock, if all projects so far either announced or mooted come to be built. Simon Thomson, Retail International managing director, said: “While Dubai will continue to dominate the headlines — especially during the coming twelve months as several mega malls come on stream — a clearer pattern is at last beginning to emerge. “Although the retail density of Dubai remains at US levels of approximately 2.4 m2 per head of population, the rapid changes currently being witnessed in the Gulf render this figure less important than a few years back.” The research consultancy believes the total shopping centre stock within the GCC could reach 11 million m2 by 2010 — an increase of around 150%. That growth will be led by the UAE and Kuwait, followed closely by Qatar. In real terms, Saudi Arabia and the UAE will remain clear leaders with projected totals reaching 4 million m2 and 5 million m2 respectively. Beyond the GCC, most of the retail construction is in Amman, Beirut and Cairo, where by 2010, retail space is expected to reach 250 000 m2 in the Jordanian capital, and up to 600 000 m2 in both Beirut and Cairo. “The fundamental demographic building blocks of economic wealth and population have continued to grow across the GCC, which when coupled with the improvements being made with inter-Gulf travel and plans for a pan-Gulf high speed railway, all point to greater homogeneity and integration of the retail market. “Add to this the emergence of a UAE tri-city scenario of Abu Dhabi, Dubai and Sharjah, with a combined population of three to four million, the retail density suddenly drops to well under half US levels, which is far more sustainable,” said Thomson. The report says that in almost every case, the major shopping centres currently under construction have either a hypermarket or major entertainment component as a key anchor. Two of the largest new malls in the world are currently under development in Dubai in the form of the Dubai Mall and the Mall of the Emirates.

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