Emaar Properties, the largest property developer in the Middle East, says the Dubai Mall is on track to open for business on Oct 30. The shopping centre, which will briefly hold the title of the world's largest mall, had originally been scheduled to open late last year, and then on Aug 28 this year.
The mall has a total area of 1.12 million square metres, with 548,000 square metres of leasable retail space. Emaar officials said the project was delayed because of additional expansion plans, but it was now in the final stages of construction. "Developing a global landmark project like the Dubai Mall is a very complex process," said Yousif al Ali, the general manager of the mall. "It involves co-ordination with several project managers, government authorities and retail tenants. The revised opening coincides with a period of key retail activity in the region, including UAE National Day, Eid al Adha, New Year and Dubai Shopping Festival." The Dubai Mall is expected to contain about 1,200 shops, an ice rink and the world's largest aquarium.
About 4.2 million square metres of mall space is in the works in Dubai, including the Mall of Arabia in Dubailand, which at 930,000 square metres will be bigger than the Emaar project when it opens in 2010. Worth about Dh367 billion (US$100bn), the retail sector is a major driving force of the economies of the GCC and has become the second-largest non-oil industry in the region. Retail spending in the UAE alone is projected to reach Dh37.44bn a year by the end of the decade.
According to Retail International, a British consultancy firm, a massive 16.35 million square metres of retail space is scheduled for completion in the GCC by 2010, with 2.6 million square metres of gross leasable area (GLA) set to be ready by next year. The UAE will see the highest increase in the GCC, contributing 44 per cent, according to Colliers International. However, some analysts caution that Dubai's passion for mall building could lead to an oversaturated retail market, particularly as consumer confidence in the UAE is on shaky grounds.
In the latest quarterly index released last month by Bayt.com and YouGovSiraj, consumer confidence in the UAE took a hit for the second time this year, with issues including inflation, job opportunities and the cost of living weighing heavily on the minds and wallets of residents. "The overall market in Dubai is heading towards overcapacity," said Robert Ziegler, the director of the research firm AK Kearney.
Retail spending per capita would have to increase 280 per cent between now and 2010 to support the fast expansion of retail space, he added. "Declining occupancy rates are expected to face the market, but for high-end retail properties such as Dubai Mall good performance is expected to continue." According to Nicholas Maclean, the managing director of the consultancy CB Richard Ellis, 55 per cent of the money spent in Dubai's malls comes from tourism. Without it, the rate of construction would be unsustainable.
"If there is a moratorium on immigration or tourism into this country then the rate of mall building will not work," he said. "We are reliant on immigration numbers and tourism numbers to sustain our [retail] business numbers." Dubai Mall, just one of several retail developments by Emaar Properties, is meant to complement Dubai's "downtown" district. The mall is situated next to Burj Dubai, the world's tallest building, which has experienced similar construction delays. vsalama@thenational.ae
