With a wave of new developments getting the greenlight, Dubai has once again claimed its top position among global cities with the highest retail stock under development. According to estimates put out by global consultancy, CBRE, Dubai’s new stock under construction is estimated at 351,805 square metres, which would include the ongoing expansions at Dubai Mall and Mall of the Emirates as well as those coming through the pipeline from developers such as Nakheel and of Dubai Festival City. Then there is also the Mall of the World — out to be the world’s largest — waiting in the wings.
And if one were to add the 214,100 square metres that malls in Abu Dhabi have in the construction pipeline, the UAE’s retail dynamic just goes on adding more clout.
But what is happening in China is beyond comparison — nine Chinese cities figure in the top 10 rankings of those with the highest new retail stock being built. Shanghai alone accounts for 4.1 million square metres of new capacity, followed by Shenzhen (3.42 million square metres) and Chengdu (3.02 million square metres).
Bangkok is the only non-Chinese city to figure in the top 10, with 1.36 million square metres being added.
But with key Asian emerging markets starting to experience a squeeze all over again, will ambitious developments in China and India go through to completion? ‘Supply in China and India is subject to risk of slippage because of the prevailing headwinds in the economy, mounting financial pressures on landlords or change in policy,’ the CBRE report notes. ‘Construction of some shopping malls are on hold due to lack of funding or landlords are considering converting these projects to other uses.’
As such, new retail developments in Asia-Pacific is spread over 32 million square metres distributed over 36 cities, with 80 per cent plus being situated in China, Thailand and India.
Meanwhile, Yas Mall’s opening ensured Abu Dhabi had a leading mention in cities which saw massive addition of retail stock last year.
‘In the Middle East — Abu Dhabi saw the completion of four new centres … of particular note is Yas Mall,’ the CBRE report notes. ‘The mall attracted 37 new brands to Abu Dhabi.’
In all, Abu Dhabi saw in 312,400 square metres of fresh retail area last year, with Wuhan in China at the top with 993,000 square metres and another Chinese city, Chengdu, in second spot with 981,000 square metres. (Dubai did not figure prominently as limited new retail stock got completed in the city last year.) According to Matthew Green, Head of Research at CBRE M.E,. “In many ways, some of the new malls in Abu Dhabi, such as Deerfields, have come on to the market even as their catchment areas are still being developed. We are seeing a lot of that happening in Abu Dhabi.”
In terms of new retail build, the Al Maryah Central Development — the $1.5 billion mixed-use project by Gulf Related — has just been granted ‘detailed project approval’ status from Abu Dhabi’s Urban Planning Council for Phase 1 of the retail component of the development. This will cover a 2.3 million square feet shopping centre, due for an opening in Q1-2018, and which will have 400 stores, 90 F&B outlets and 20-screen cinema among other attractions.
“We are well placed to deliver against our schedule, with construction having commenced at the end of last year, and are rapidly progressing with our finance and leasing commitments, on which we expect to make further announcements in the coming months,” said Kenneth Himmel, President and CEO of Related Urban and the Co-Managing Partner of Gulf Related.
Phase 1 will be anchored by the American department stores, Macy’s and Bloomingdale’s.
By Manoj Nair
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