Chinese visitors to boost Mid East retail development, says ICSC trustee

The forecast came at the first-ever International Council of Shopping Centres' (ICSC) Industry Forum in the People's Republic of China (PRC), where Phil McArthur, Managing Director - Shopping Centres and Commercial Real Estate of Dubai's Al Futtaim Group, was presenting Dubai Festival City as a case study in shopping centre development excellence to 'the emerging economic dragon's' retailers and industry leaders.

"With a population of 1.3 billion and an economy which grew by an impressive nine percent in 2005, the People's Republic of China is one of the most powerful and influential economic entities in the world," said McArthur - the ICSC's first appointed trustee for the Middle East. "Chinese tourists also have one of the highest retail spends out of any nation with an average of US$175 per day - an audience we cannot afford to ignore.

"This factor has not gone unnoticed by the region's airline carriers who are increasingly stepping up their services to Asia, which translate into further growth in tourist traffic to the Middle East."

With over 101.2 million square feet of retail space expected to come on-line throughout the Middle East by the end of the decade, retailers are targeting a slice of the considerable Chinese outbound tourist market, which is expected to rise to 100 million per year by 2020, as a key customer base.

"According to Retail International, Dubai's retailers alone have to generate US$8 billion in sales by 2009 to sustain the massive increase in shopping centre space and retail activities. The lucrative outbound Far-East tourist markets will be an important source in achieving this,"

added McArthur, whose remit also takes in Dubai Festival City, the Middle East's largest privately-funded, mixed-use real estate destination.

Chinese retailers are also eyeing the buoyant Middle East market with Dashang, China's retailing giant which ranks 96th in the top 500 Chinese companies, the latest to declare interest in Dubai.

"When we come here we won't just open one departmental store, we will open many," said Niu Gang, Dashang's Board Chairman, whilst visiting the emirate on a fact-finding mission.

Dubai Festival City's distinctive, 2.6 million square feet 'urban retail resort', Festival Centre, which has pioneered a unique 'fusion concept' of shopping, entertainment and hospitality, was leveraged as a leading model in shopping centre management and marketing at the event held in Shanghai and the country's capital, Beijing.

"This presence in China is in line with the commitment of this 'city-within-a-city' development to build global awareness not just for its own brand, but for Dubai Inc. as an emerging retail and tourism destination of global standing," said McArthur.

"Dubai Festival City has actively supported ICSC's activities and is totally committed to its mission of advancing the development of the shopping centre industry and establishing the shopping centre as a major community institution."

This address came just weeks before Dubai Festival City gears up for the second phase opening of Festival Centre which is being lead by the launch of the 175,000 square feet HyperPanda hypermarket - the first outside of its native Saudi Arabia - and the specialised retail park which includes the flagship PlugIns ElectroniX and Ace Hardware & Garden Centre stores.

According to McArthur, Sino-Arab tourism growth has every potential of mirroring the surging trade patterns between the two.

"In just 10 years, the world's most populous nation has established itself as one of the largest trading partners of the United Arab Emirates. The UAE is the largest export market in the Middle East for China and the third worldwide after the US and Japan," explained McArthur.

Hong Kong's imports alone from the Middle East grew from US$ 3,473 million in 2004 to US$ 3,800 in 2005. The value of trade between the GCC and China in 2005 totalled over US$30 billion, with the UAE responsible for a third.

"The relationship between China and the Middle East will prove hugely beneficial in the long-run and many regional companies are shifting their focus to ensure they establish themselves as a committed player," added McArthur.