Issue No 304 - 23 March 2009
UAE retail real estate to grow 12pc

Retail real estate sales in the UAE are likely to grow around 12 per cent annually from last year to 2011, according to a report.

Middle East Council of Shopping Centers (MECSC) named Saudi Arabia as the country with the best retail opportunities in the current situation while Bahrain will be a direct beneficiary being a favorite tourist hub for Saudi nationals.

But due to expected short-term oversupply of gross leasable area in some markets this year, mall and leasing managers need to develop new strategies to reduce the impact of sharp vacancy increases and downward pressure on rental rates, MECSC, the Middle East's trade body for the retail real estate, said in the report.

'Given the tough market conditions and the impact of the global economic slowdown that the industry is facing, it is the need of the hour for the industry to come together and formulate new strategies to help overcome the challenges and make way for future growth' said MECSC regional director Kim Redman.

The MECSC is organizing a workshop titled 'The changing dynamics of retail leasing management' on April 8 and 9 in Dubai.

'There is going to be a clear slowdown in upcoming projects, however this could be of benefit for the retail market to look back, being able to focus more on existing shopping malls and taking the opportunity to develop these even more,' MECSC president Maher Al Shaer said.

Workshop facilitator Walter Kleinschmit, one of the founding members of MECSC and industry expert with more than 25 years of experience, said: 'This is not a buyer's market; it is a tough market for both the landlord and the tenant.'

'Difficult times are the best time to grab market share and increase customer loyalty and support' he said.

'It's a good time for shopping malls to diversify their retail offering. A mall that is doing better than average will hence attract retailers that also want to take advantage of the difficult times to refine their offering.'

Source: Trade Arabia News

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