According to IIR Middle East, the organizer of Retail City, current GCC retail space will treble to more than 15 million square metres by 2016, as the burgeoning tourism industry and regional population growth spurs the longer-term prospects for GCC retail industry. Retail City, the region’s leading international retail real estate event, which takes place at the Dubai International Exhibition Centre (DIEC) on June 3-5, 2007, is also witnessing exponential growth in line with industry sentiment.
Naomi Koningen, project manager, Retail City 2007, commented, “We have experienced 350 per cent year-on-year growth, mirroring the pace of regional retail real estate development. International industry professionals are eager to participate in what is now clearly recognized as a rapidly expanding and sustainable market.”
In a recent survey report by Retail International, 5.3 million square metres of retail floor space is already available and the retail sector is estimated to be worth US$100 billion annually. Currently, the four main drivers behind this retail phenomenon are the cities of Dubai, Abu Dhabi, Riyadh and Jeddah. Dubai remains at the core of this development hosting 1.3 million square metres, with Abu Dhabi, Riyadh and Jeddah each having between 750,000 and 800,000 square metres.
This is set to double in just a few short years, with a further 4.6 million square metres of gross leasable area (GLA) currently under construction. Dubai Festival City, Dubai Mall and Mall of Arabia will add some 1.2 million square metres. Elsewhere in the region, another 750,000 square metres will be added through developments in Doha at Le Villaggio and The Pearl-Qatar, in Kuwait with the Mall of Kuwait, Al Shobily Grand Mall in Khobar, Saudi Arabia, and the new Bahrain City Centre project in Manama.
The justification behind this extraordinary acceleration in retail development is two-fold. Firstly, the number of tourists visiting the region is estimated by World Tourism Organisation to reach 68 million by 2020. Again, Dubai has taken the lead with five million visitors in 2005, which will climb to 15 million tourists by 2010.
Secondly, the population throughout the GCC countries is currently estimated to be 36 million, and the average annual projected population growth is set at 3 per cent (World Development Indicators 2005). Therefore, the region’s population should increase to over 50 million (up 40 per cent) by 2015; Riyadh’s population alone will treble to over 15 million inhabitants.