Qatar gears up for 2022 World Cup with more... Shopping malls!

Published March 23rd, 2017 - 04:40 GMT
Costing QR6.5 billion, Doha Festival City is set to be among the largest malls in the GCC when it opens in April. (Shutterstock)
Costing QR6.5 billion, Doha Festival City is set to be among the largest malls in the GCC when it opens in April. (Shutterstock)

With the total retail space in the country set to increase to around 1.85 million square metres by the end of 2019, retailers are confident the sector's performance will reward investment over the medium to long term, according to a report by Oxford Business Group (OBG).

However, the retailers have also expressed the need for evolution in the approach of large shopping centres to keep customer interests alive.

According to OBG, nine malls are expected to open in Qatar by 2019, and with abundance of new supply, the retail space is set to transform the country's thriving retail landscape, with sustained levels of consumer confidence and high occupancy rates driving optimism among brick-and-mortar retailers.

The retailers' confidence is backed by figures released by the Qatar Statistics Authority on high gross income per capita in Qatar, translating into high consumer spending, which reached a new high of QR131.7 billion ($36.2 billion) in 2015, up from QR118.5 billion ($32.6 billion) in 2014.

A recent survey, commissioned by American Express Middle East, and conducted by German market research company, said wealthy Qataris spent an average of $4,000 a month on luxury goods in 2015, twice the GCC average and around 12 percent of their household income. Meanwhile, UK-based BMI

Research said in January 2017 that household retail spending growth in Qatar would average 10.2 percent until 2020.

Some concerns had been raised that the retail market in the country may suffer from the dual effects of oversupply and more straitened economic circumstances in the coming years. However, DTZ in its report had said that occupancy levels and rents have remained high, with malls in Doha typically charging QR260-QR300 ($74.10-82.40) per sq metre for rent on a monthly basis. By comparison, the upper end of the average range in 2014 was around QR260 ($74.10).

"It is true that retail will face an oversupply in the coming years," Kareem Shamma, CEO of Doha Festival City, told OBG. 

"As a result, the market is responding by moving more towards entertainment. In fact, we do not consider ourselves a mall shopping is only one part of the whole experience."

Costing QR6.5 billion and offering 244,000 sq metres of gross leasable area, Doha Festival City is set to be among the largest malls in the Gulf when it opens in April. The entertainment elements at Doha Festival City will include an Angry Birds theme park, an"edutainment" city for children, an Arabian-themed snow park and an adults-only videogame area. 

Another key development project in Qatar is Lusail City's Place Vendome a multi-purpose complex that will include a mall with 500 retail outlets. 

Sean Kelly, the project's director, told OBG that the $1.5 billion project already has strong lease commitment from retailers, with completion of works scheduled for late 2018. He also stressed the need for brick-and-mortar retailers to offer something different to continue to draw shoppers.

"With the increase in retail supply and the growth of e-commerce, retail destinations are having to be increasingly competitive in providing the customer with focused and personalised customer service," Kelly was quoted in the OBG report.

By Asif Iqbal
 
 

© Copyright Qatar Tribune. All Rights Reserved.

You may also like