IKEA, the world's largest home furnishings company, is set to open its largest regional store in Abu Dhabi, as the Swedish company expands its Middle East footprint.
Aldar Properties said yesterday it had signed an agreement with the Al-Futtaim Group to build the store on Yas Island, the leisure destination being developed in the emirate.
The opening of IKEA on the island is another boost to Aldar's US$40 billion (Dh146.92bn) development, which will host the Formula One Grand Prix for the first time in November.
The Abu Dhabi developer said the island was chosen for the store because of its location within the new growth area of the emirate, and its accessibility, close to a new road network.
IKEA, famed for its low-price, self-assembly furniture, has an existing store in Abu Dhabi at the Marina Mall, in addition to a store in Dubai's Festival City, currently the largest in the region, which opened in 2005.
The retailer's expansion of its presence in the UAE capital is part of a switch in its global focus from saturated markets such as the US and Europe to emerging markets that include the Middle East, China and Russia. Despite the financial crisis, IKEA said in May it was planning to push ahead with plans to expand into Oman and Qatar, in addition to opening more stores in Saudi Arabia.
Omar al Futtaim, the chief executive of the Al-Futtaim Group, which represents IKEA in the UAE, said: "It has been an Al-Futtaim group tradition to provide our customers with the best brands and services, and the new IKEA store, which will be the biggest in the Middle East, endorses that commitment."
The store will form part of Yas Island's retail centre, based around Yas Mall, which will accommodate a mix of retailers.
Customers will be able to reach IKEA via the new 10-lane Shahama-Saadiyat highway, which passes through Yas Island.
Ahmed Ali al Sayegh, the chairman of Aldar Properties, said: "The presence of this major international retail brand fits perfectly with our vision for Yas Island as an unrivalled shopping and entertainment destination."
The company's expansion into the Gulf has been driven by Mikael Ohlsson, the group chief executive of IKEA, who succeeded the man who was chief executive for the past 10 years, Anders Dahlvig, at the start of this month.
IKEA's famously frugal founder, Ingvar Kamprad, started the company in 1943 in the Swedish village of Agunnaryd when he was just 17. Since then, the group has expanded into a global retail presence that encourages its customers to "chuck out their chintz" and replace it with the retailer's low-cost, flat pack furniture, which customers typically assemble themselves.
Today it employs 128,000 workers in 24 territories around the world and generates annual sales of more than ?21.1 billion (Dh113.74bn). But the company has also been hurt by the global crisis, with Mr Kamprad admitting in July that it may have to cut more staff because of weaker consumer demand.
IKEA would have to cut more staff, mainly within manufacturing and logistics, Mr Kamprand was quoted as saying in a Swedish newspaper.
Mr Kamprand now acts as an adviser to the retailer.
IKEA started its UAE operations in Dubai in 1991 in Zabeel Road, before moving to Deira City Centre in 1995. In Saudi Arabia it operates in Riyadh, Jeddah and Dammam.
Yas Island will host the Formula One Grand Prix from October 30. The development also includes Ferrari World, a Warner Brothers theme park and a links golf course. Seven hotels are opening in time for the Formula One race.
tarnold@thenational.ae
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
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A list of the animal rescue organisations in the UAE
KILLING OF QASSEM SULEIMANI
Nayanthara: Beyond The Fairy Tale
Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni
Director: Amith Krishnan
Rating: 3.5/5
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
Disclaimer
Director: Alfonso Cuaron
Stars: Cate Blanchett, Kevin Kline, Lesley Manville
Rating: 4/5
The Settlers
Director: Louis Theroux
Starring: Daniella Weiss, Ari Abramowitz
Rating: 5/5
Tailors and retailers miss out on back-to-school rush
Tailors and retailers across the city said it was an ominous start to what is usually a busy season for sales.
With many parents opting to continue home learning for their children, the usual rush to buy school uniforms was muted this year.
“So far we have taken about 70 to 80 orders for items like shirts and trousers,” said Vikram Attrai, manager at Stallion Bespoke Tailors in Dubai.
“Last year in the same period we had about 200 orders and lots of demand.
“We custom fit uniform pieces and use materials such as cotton, wool and cashmere.
“Depending on size, a white shirt with logo is priced at about Dh100 to Dh150 and shorts, trousers, skirts and dresses cost between Dh150 to Dh250 a piece.”
A spokesman for Threads, a uniform shop based in Times Square Centre Dubai, said customer footfall had slowed down dramatically over the past few months.
“Now parents have the option to keep children doing online learning they don’t need uniforms so it has quietened down.”
