E-commerce shaping Dubai’s retail market, says JLL


July 5, 2017 | By Rupkatha B

The retail sector in Dubai continues to evolve and adjust in the light of the fast pace of technological advancements, indicates JLL’s Q2 2017 Dubai Real Estate Market Overview report, with retail brands and centres merging both online and offline experiences as the lines between bricks-and-mortar and online retailers continue to blur.

The second quarter witnessed Dubai Chamber of Commerce and Industry signing a memorandum with SOUQ.com to help more SMEs and entrepreneurships in the region to gain exposure to online platforms. The move sees Dubai continuing to contribute to the rising trend of e-commerce, with the Dubai Chamber expecting online to account for 10% of Dubai’s total retail trade in the near future.

Amazon’s recent purchase of SOUQ.com represents a major advance for e-commerce in the region.  Responding to this trend, Emaar Malls has acquired a majority stake in fashion e-tailer Namshi.com during Q2.

“The Dubai real estate market largely remained relatively subdued in Q2, market sentiment is however expected to become more positive in the second half of the year,” says Craig Plumb, head of research, MENA, JLL.

Despite challenges retail activities continue

The second quarter saw one neighbourhood retail completion in Jumeirah Islands, which added 30,139 sqft of GLA to the market. The pipeline for the second half of 2017 includes 2.4 million sqft of GLA currently under construction, with The Pointe on Palm Jumeirah and Marsa Al Seef in Al Hamriya expected to contribute more than 50% of the total. Dubailand sees continued construction, with approximately 430,556 sqft of GLA scheduled to complete in H2 2017.

Dubai is undoubtedly the leading retail location within the GCC with 36.5 million sqft of retail malls, ahead of other major cities such as Abu Dhabi (28.2 million sqft), Jeddah (13 million sqft) and Riyadh (12.6 million sqft). On an international scale, Dubai has approximately twice as much retail space per capita as London, indicating its reputation as a major international retail hub.

Given the soft market conditions, however, some delays may occur that could lead to delays and a scaling back of future retail supply. The pressure to complete and hand over projects is expected to intensify in the coming two years, in anticipation of the potential boost to retail spending around Expo 2020.

Rents in the retail space has started to show single digit declines during Q2, supporting the anecdotal evidence over the last few quarters, which suggested that the market was under pressure. Landlords continue to adopt approaches to leasing which are favourable to tenants, in order to retain them.

Overall, although the short term picture for retail in Dubai is challenging – due to the slowdown in the rate of economic growth and the strength of the Dollar – the medium to longer-term picture remains more positive.

An overview on office, hotel & residential markets

The office sector witnessed a relaxation in regulations resulting in offshore activities being permitted within the Dubai International Financial Centre, and dual licenses to allow firms to undertake both onshore and offshore activities from a single location. These new regulations will be able to expand potential demand within the DIFC, paving way for overall economic growth of the city.

The fast growth of Dubai’s tourism over the last decade following the government’s strategy to diversify the economy in the run up to Expo 2020 has opened doors to the hospitality market becoming more complex. Investors are now becoming more creative in their approach and the first hospitality focused REIT (FIVE Holding REIT) has been announced in Q2. Traditional players are now reconsidering their strategies rigorously through re-branding or de-branding properties, the report added.

The residential sector witnessed 5,400 completed properties being sold in the first give month of 2017, an increase from the 4,500 units that were sold during the same period of 2016. With little change in either sale prices or rentals recorded over the quarter, the residential market remains relatively stable as the recent down cycle nears an end.

Comments

comments

Previous Article Next Article

SHARE

YOU MAY ALSO LIKE /


Lulu Group partners with Amazon expanding grocery offerings to online customers in the UAE

Abu Dhabi based grocery retail chain Lulu Group has partnered with Amazon 

Continue Reading

November 24, 2022 | By RetailME Bureau
Food Tech Valley partners with Tradeling to boost UAE’s food ecosystem

UAE-government-led initiative Food Tech Valley – announced in 2021 by His Highness 

Continue Reading

November 17, 2022 | By RetailME Bureau
Lulu Hypermarket to open in The Dubai Mall in 2023

Abu Dhabi-based supermarket chain Lulu Hypermarket is all set to open in 

Continue Reading

November 10, 2022 | By Rupkatha B
Beyond Meat’s Q3 2022 results “disappointing”

Plant-based meat brand Beyond Meat’s financial results for the third quarter of 

Continue Reading

November 10, 2022 | By RetailME Bureau
Barakat unveils new biodegradable packaging

UAE’s fresh produce brand Barakat has launched bio-degradable packaging across its entire 

Continue Reading

October 27, 2022 | By RetailME Bureau
Pure Harvest CEO Sky Kurtz

UAE-based agritech start-up Pure Harvest Smart Farms has signed a Memorandum of 

Continue Reading

October 27, 2022 | By RetailME Bureau
Carrefour signed up as anchor tenant for Midtown Project

Carrefour, owned and operated by Majid Al Futtaim – Retail in the 

Continue Reading

October 27, 2022 | By RetailME Bureau
Grandiose Supermarket announces country-wide expansion plans

Grandiose Supermarket, part of Ghassan Aboud Group, has announced expansion plan in 

Continue Reading

October 26, 2022 | By Rupkatha B
100 years of Valrhona

The Valrhona journey began 100 years ago with a cocoa bean. Since 

Continue Reading

October 24, 2022 | By Justina Eitzinger
On-demand grocery delivery in 15 mins

Deliveroo UAE has announced the expansion of its rapid grocery delivery service 

Continue Reading

October 24, 2022 | By RetailME Bureau
Mariam bint Mohammed Almheiri, Minister of Climate Change and Environment

The Ministry of Climate Change and Environment (MOCCAE) revealed that the UAE 

Continue Reading

October 17, 2022 | By RetailME Bureau

Abu Dhabi-based leading supermarket chain Lulu Group has appointed investment bankers Moelis 

Continue Reading

October 13, 2022 | By RetailME Bureau




f
Download Images RetailME Magazine