Upload
doannga
View
224
Download
1
Embed Size (px)
Citation preview
RESEARCH
UAE INDUSTRIAL &LOGISTICSRESEARCH REPORTH1 2015
RESEARCH
A MARKET SNAPSHOT IN THE EVOLVING UAE RETAIL LANDSCAPE
RETAIL FOCUSRESEARCH REPORTAUTUMN 2015
RETAIL SUPPLYAs the UAE witnesses additional upcoming supply (Dubai and Abu Dhabi), the retail market needs to mature and position existing and future supply. With an existing and upcoming supply of over 10 million sq m (107 million sq ft), the retail provision per capita continues to be one of the highest in the world.
• The decline of oil prices and a strengthened US $ against many of the world currencies is affecting the overall spending of residents and tourists.
• However, the growth expected in the UAE’s non-oil economy over the next 5 years is an unmistakable opportunity for international retailers.
• As per the IMF, non-oil growth in the UAE is projected to slow to 3.4% in 2015, before increasing to 4.6% by 2020, supported by the
Please refer to the important notice at the end of this report
Yas Mall
Al Maryah Central
Retail supply ⬈Retail demand ➡
Consumer confidence
Estimated rental values ➡
Mall occupancy
Market growth
Source:Knight Frank Research
FIGURE 1 Dubai & Abu Dhabi Market Indicators
Mid-market
implementation of mega-projects and private investment in the run-up to Expo 2020.
• The wholesale and retail sector is estimated to account for 29% of Dubai’s total GDP and 25% of the total workforce.
• UAE population is forecast to increase by almost 20% from 2015-2020. Tourism is a key driver of shopping figures and is rising sturdily with almost 40% of Dubai Mall’s footfall in 2014 accounted for by non-residents.
Dubai Design District (d3) Phase 2
Dubai Recent retail development/supply in Dubai has focused on new mall expansion projects (such as Mall of the Emirates and Ibn Battuta) while other projects included community focused, niche shopping centres such as d3 and Me’aisem City Centre.
The recent expansion of Mall of the Emirates and Dubai Mall also indicates the continued demand for super regional malls in Dubai as well as the repositioning of the tenant mix.
The Mall of the World, a 743,000 sq m (8 million sq ft) master planned development in the heart of Dubai,
Abu Dhabi Abu Dhabi’s supply continues to be focused on larger projects including regional malls, such as Reem Mall and Maryah Central. This is in addition to planned mall expansion projects such as Marina Mall.
Abu Dhabi retail is currently segmented with c.10% community retail and c.80% regional and super regional. This clearly highlights the significant change in retail format since 2012, when super regional malls did not exist and regional malls were more primitive in their offering.
Yas Mall, which opened in late 2014 provides Abu Dhabi with a new super-regional mall (238,000 sq m) which, with surrounding attractions such as Yas Waterworld and Ferrari World, will help ease off the flow of residents to Dubai, as well as attract tourists to the capital. Abu Dhabi continues to witness the delivery of new hotel developments which is creating potential demand from leisure and business visitors alike (Figure 4).
Source:Knight Frank Research
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
FIGURE 4 Total Mall Supply, Abu Dhabi
Existing Upcoming
Current supply
RESEARCHUAE RETAIL RESEARCH REPORT
DUBAI AND ABU DHABI RETAIL DEMANDRetail demand in the Emirates will be driven by resident population growth and tourism from the Gulf and beyond.
UAE retail sales are set to grow by 32.9% from US$ 31 billion in 2011 to US$ 41.1 billion in 2015.
The UAE’s population is 9.5 million and is expected to grow to c. 15 million by 2050 according to the United Nations (Figure 5). Higher consumer confidence and disposable income amongst Emirati’s and expatriates, compared to other retail hubs, has helped the UAE to develop a burgeoning retail sector.
The GCC nations, the top source of UAE’s inbound shopping tourists, have a high GDP per capita (Purchasing Power in Parity) with an average of US$ 69,792 across the six nations. This has the potential to be translated into high consumer spending.
However, lower oil prices and imple-mentation of potential taxation policies could impact the retail spend in H2 2015
and 2016. This may be reflected in the Nielsen Consumer Confidence Index, which has fallen by 8 basis points in the first three quarters of 2015 (Figure 6).
The importance of air traffic to the UAE is significant for retail growth; Dubai International overtook London Heathrow as the world’s busiest airport with c. 70 million passengers and Abu Dhabi increased to over 20 million passengers in 2014 (Figure 7). Both cities must develop their infrastructure, tourism and retail offering to increase overnight stays as well as increase the retail conversion rate.
Dubai currently witnesses an average visitor stay of 3.8 nights compared to an average of 7.7 nights in London. A total of 13.2 million foreigners headed to Dubai in 2014, an increase of 8.2 % compared with the previous year.
The Dubai Expo 2020 is seen as future growth for tourism (20 million tourists per annum by 2020) and retail demand which will be a focus for retailers expansion.
Dubai has seen a 41% rise in Iranian visitors in 2014. The lifting of the Iranian sanctions is envisaged to directly impact trade and tourism in Dubai leading to greater expenditure. While the flow of Iranian tourists, businesses and goods will help increase retail returns, potential growth of resident spending is expected to prevail against the overall falling number of tourists this year.
Abu Dhabi has seen a 14% increase in guest nights in 2015 to August compared to the previous year. The total number of guests increased 20% over the same period highlighting the resilience of tourism in the Emirate. It is noted that although Russian visitors, usually associated with luxury retail spending, declined by 10%, Chinese tourists increased by 68%. These figures strongly suggest that tourism and spending in Abu Dhabi is on the rise.
Retailer insight• A number of brands operated in
the UAE are controlled by the larger retailer groups. Between them the largest five companies franchise or operate in excess of 350 brands.
• An indicative portfolio is weighted
Source:Knight Frank, A.T. Kearney, Nielsen, Dubai International Airport, BMI, Abu Dhabi Tourism Authrortiy
FIGURE 7 Historic & Forecast Passenger Movements
Source:: Abu Dhabi Airports Company, Dubai Airports
100
80
60
40
20
0
Pass
enge
r Mov
emen
ts (M
illion
s)
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
98
3229262320171512111097
8983
7770
6658
5147
413734
Dubai International Airport (DXB)
Abu Dhabi International Airport (AUH)
2020
FIGURE 5 Dubai & Abu Dhabi, Population (2014-2020)
Sources:Knight Frank Research, Statistics Centre of Abu Dhabi (SCAD), Dubai Statistics Centre (DSC), United Nations (UN)
2014 2015 2016 2017 2018 2019
4,500,0004,000,0003,500,0003,000,0002,500,0002,000,0001,500,0001,000,000
500,0000
ForecastAbu Dhabi
Dubai
highlights the potential growth for the retail sector in Dubai at the super-regional level and the high level of confidence held among developers. The development will be completed in phases to meet the evolving retail and tourism market for the region.
The Dubai retail market continues to be dominated by super-regional malls, representing 52% of the existing supply, whilst new developments focus on regional and community retail projects accounting for 12%. The latest trend is toward a mid maket retail offering which caters to the resident population while destination malls, in addition to that, target inbound tourists.
Al Maryah CentralLocated on the master-planned, Al Maryah Island, the new financial free zone of Abu Dhabi.
Al Maryah Central will be a 150,000 sq m (1.6 million sq ft) development which will be integrated with the existing Galleria, a 24,000 sq m (258,000 sq ft) luxury mall.
Scheduled to open in 2018, the project has commenced ground works and will become the pre-eminent urban shopping destination in Abu Dhabi.
The mall will comprise over 400 stores; incorporating the first Macy’s in the UAE and the first Bloomingdales in Abu Dhabi, as well as cinema, entertainment centre, food hall and sports area.
The project is master planned to incorporate a hotel and residential tower to complement the existing ADGM Square which consists of five office buildings and two hotels; in addition to the Cleveland Clinic and Al Maryah Tower which are completed on the island.
FIGURE 6 Nielsen - UAE Consumer Confidence Index
Source:Nielsen
Q3
2012
Q4
2012
Q1
2013
Q2
2013
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Q1
2015
Q2
2015
Q3
2015
116
114
112
110
108
106
104
102
FIGURE 3 Total Hotel Guest Nights (2007-2014), Abu Dhabi
Source:Abu Dhabi Tourism Authority (ADTA)
2007
2008
2009
2010
2011
2012
2013
2014
8,789,215
10,463,137
4,275,063
4,673,494
4,318,504
5,132,323
6,269,682
6,996,724
Dubai Design District (d3)d3 is a three phase master-planned mixed use development, comprising office, residential and retail accommodation, providing the creative industries with a hub in the heart of Dubai.
Phase 1 handover was completed in October 2015 with eleven buildings and over 18,000 sq m (200,000 sq ft) of retail ready for occupation.
The street level retail inspiration will provide an alternative shopping experience to malls and will offer a unique all-day destination for office workers and visitors alike.
The retail element is focused on incubating new-to-market brands and concepts, which can benefit from 100% foreign ownership within the free zone.
The Creative Community (the phase 2 element currently under construction) will provide a collaborative mix of workshop, design studio, mezzanine office and ground floor retail space to create a genuine work/play destination. Expected delivery 2018.
Source:Knight Frank Research
27% toward F&B which has been seen as an attractive sector in the UAE.
• There is growth in home grown brands for both F&B and apparel which is creating a new market
segment and is dynamic within the retail scene, with particular emphasis on concept store creations.
• Retailers are looking to community mall projects to help facilitate expansion within the Emirates.
• Changes in consumer spend such as a fall in Russian tourists, Chinese spend (currency fluctuations) and lower oil prices, have contributed to a reduction in luxury goods spend. However, double digit growth of tourists from emerging markets, the potential effect of Iran’s economic comeback and the increase in resident spend should all translate to an increase in retail spending.
• Growth of retail sales is expected at 5% in 2015, while leasing rates over the next quarter are expected to stabilise for retail accommodation.
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
FIGURE 2 Total Mall Supply, Dubai
Existing Upcoming
CurrentsupplyG
LA (s
q m
)
GLA
(sq
m)
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
RESEARCHUAE RETAIL RESEARCH REPORT
FIGURE 10 Existing Retail Developments Split by Type (2014), Abu Dhabi
FIGURE 11 Upcoming Supply, Split by Retail Type (2015-2025), Abu Dhabi
Source: Knight Frank ResearchSource: Knight Frank Research
Convenience
Neighbourhood
Community
Regional
Super-regional
Neighbourhood
Community
Regional
Super-regional
FIGURE 8 Existing Retail Developments Split by Type (2014), Dubai
FIGURE 9 Upcoming Supply, Split by Retail Type (2015-2025), Dubai
Source: Knight Frank ResearchSource: Knight Frank Research
Convenience
Neighbourhood
Community
Regional
Super-regional
Neighbourhood
Community
Regional
Super-regional
52%24%
13%
9%2% 3%
8%
1%
88%
1%7%
11%
36%
45%
36%
12%
8%
44%
Knight Frank Research Reports are available at KnightFrank.com/Research
AGENCY - Abu DhabiMatthew DaddPartner+971 56 6146 [email protected]
AGENCY - DubaiWilliam Neill Partner+971 56 4202 [email protected]
DEVELOPMENT CONSULTANCY & RESEARCHHarmen De JongPartner+971 56 1766 [email protected]
Diaa NoufalAssociate Partner, MENA Research+971 56 4552 [email protected] VALUATIONSStephen FlanaganPartner+971 50 8133 [email protected]
CAPITAL MARKETSJoseph MorrisPartner+971 50 5036 [email protected]
UAE RESIDENTIALMaria MorrisAssociate Partner+971 56 4542 983 [email protected]
INTERNATIONAL RESIDENTIALVictoria GarrettAssociate Partner+971 56 7835 523 [email protected]
RECENT MARKET-LEADING RESEARCH PUBLICATIONS
Important Notice © Knight Frank LLP 2015 - This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information, analysis, views and projections presented in this report, no responsibility or liability whatsoever can be accepted by Knight Frank LLP for any loss or damage resultant from any use of, reliance on or reference to the contents of this document. As a general report, this material does not necessarily represent the view of Knight Frank LLP in relation to particular properties or projects. Reproduction of this report in whole or in part is not allowedwithout prior written approval of Knight Frank LLP to the form and content within which it appears.
Knight Frank UAE Limited - Abu Dhabi is a foreign branch, with registration number 1189910. Our registered office is Unit 103, West Tower, Abu Dhabi Trade Center, Abu Dhabi, PO Box 105374, Abu Dhabi, UAE.
Knight Frank UAE Limited - Dubai: Prime Star International Real Estate Brokers “PSIREB” RERA ORN: 11964 trading as Knight Frank with registration number 653414. Our registered office is 5th Floor, Building 2, Emaar Business Park, PO Box 487207, Dubai, UAE.
Dubai Real Estate Market Overview: 2014 Key Events & 2015 Outlook
The Hub Report 2015
Retail Advisory & Consultancy
The Wealth Report 2015Middle East Property Management Consultancy
Dubai Hospitality Report H1 2015
Global CitiesThe 2016 Report
Abu Dhabi Office Research Report H1 2015
UAE Industrial & Logistics Research Report Q3 2015
Dubai Real EstateInvestment Report 2015
Dubai Offices Market Update Q3 2015
Saudi Arabia Offices Research Report H1 2015