Abu Dhabi overtakes Dubai in mall development

In its latest survey measuring the level
of shopping centre development in 180 of the world's major cities, CBRE said Abu Dhabi currently ranks number 10, while Dubai is in 25th place.

Commenting on the Abu Dhabi market, Mat Green, Head of Research UAE, CBRE Middle East, said: "After a period of significant undersupply, where many of the major malls have been running at close to 100% occupancy, we are now entering into a new growth period for retail stock."

"Over the next four years around 0.8 million square metres of new mall space across nine schemes will be delivered to the market, helping to establish Abu Dhabi as a new destination for retail in the Middle East."

"During this period we will see a dramatic transformation of the retail landscape, both in terms of supply and quality. We are also expecting an influx of new retail brands, some of which will be opening their first stores in the region. Overall, we see this is an exciting time for retail in the capital," Green continued.

Worldwide, an unprecedented 32 million sq m of shopping centre space is under construction in the 180 cities covered in the survey, some 15% more than at the same time last year, CBRE said.

Development activity is heavily concentrated in emerging markets, with China home to more than half of all the space under construction and seven out of the top 10 most active development markets. Heading the list is Chengdu where 2.9 million sq m is currently under construction, which is more than the combined pipeline in the survey's 86 European cities (excluding those in Russia and Turkey).

Other markets experiencing substantial expansion include Istanbul, Moscow, St Petersburg, New Delhi, Kiev, Hanoi and Kuala Lumpur.

The rapid growth of new shopping centre development in emerging, as opposed to 'mature', markets is attributed to a growing middle class, the urbanisation of large cities and consumer demand for better quality retail, the report noted.

A second key theme, present for some time in mature markets but now a feature of emerging markets also, is the focus on developing a customer experience that is not just about shopping.

This is especially the case in Dubai and Abu Dhabi, the report noted, where leisure attractions have become an increasingly important part of the mix in the major malls in these cities. "Bowling, cinemas, ice rinks and amusement areas are now commonplace and have created 'destination' centres that have also become social meeting points, particularly among the young local population. This has created a new dynamic with shopping centres evolving into a place to be, not just to shop," the report added.