Emaar Properties, Dubai's biggest real estate developer, plans to build the “world’s first technology-embedded” shopping mall at a Dh10 billion ($2.7bn) retail complex planned for Dubai Creek Harbour, its chairman said on Tuesday.
The Dubai Square mall will span approximately 750,000 square metres – bigger than Emaar’s flagship The Dubai Mall, the biggest in the world – and have its own ‘Dubai OS’ operating system embedded into its wifi infrastructure to support retailers’ e-commerce operations, Mohamed Alabbar said.
“Omnichannel retail is the way forward so shopping malls are here to stay, but they require e-commerce DNA to be embedded in their bricks and mortar,” Mr Alabbar told media and stakeholders at an event to unveil the plans.
His $1bn e-commerce venture Noon.com will play a significant role in Dubai OS, with retailers able to list their products on the website. The system will allow shoppers at Dubai Square to purchase products if it is not in stock, then UAE-based logistics firm Aramex, in which Mr Alabbar has a stake, will deliver them as far away as Egypt, the chairman added. A storage warehouse will be built close to the mall with a conveyor belt system to transport stock to and from the shops.
The Dubai Square mall is part of a wider Dubai Square mixed-use district being built in partnership with state-owned Dubai Holding. The development is part of the masterplan for Emaar’s six-square-kilometre Dubai Creek Harbour intended to become the new heart of the emirate.
Emaar is banking on e-commerce growth as the GCC market is forecast to grow to $24bn by the end of the decade, up from $15 billion this year, according to consultancy A T Kearney.
The Dubai Square project would cost Dh10bn and be half funded through debt and half from Emaar capital, the chairman said.
The development has been designed to resemble an indoor city, with a glass roof, streets, piazzas, squares and boulevards and a rooftop water park on one section.
Mr Alabbar did not say how many retail outlets it will have, but a statement from Emaar said Dubai Square has twice the gross leasable area of The Dubai Mall. It will house the Dubai Chinatown shopping centre announced last week.
The district will also include a public transport hub based on New York’s Grand Central Station, designed to funnel passengers from different parts of Dubai via a metrolink.
Emaar is targeting the 75 million transit passengers that pass through Dubai International Airport each year. “If we can make it possible for five or six million to visit Dubai Square during a 3-4-hour stopover, that would be great,” Mr Alabbar said.
Approximately 16 million square feet of additional retail space is expected to come to the market over the next three to four years, according to the latest Dubai Retail Overview by consultancy Core Savills, published this month.
While prime and super-prime malls are attracting healthy footfall, smaller community shopping centres witnessed a 3 to 5 per cent annual drop in occupancy in the 12 months to March. Dubai’s retail sector is expected to face continued pressures in 2018 due to increasing supply and a drop in retail spending following the three-year oil price slump.
Mr Alabbar said he is not worried about retail oversupply, because the Dubai market “goes through cycles and if you do your homework, make sure your financing is right and understand the market”, you should survive. “We know the market well and have a balance sheet that can handle projects like this,” he added.
“Look at population growth, tourism growth…We are doing our number crunching and trying to do the best we can, so let’s see what happens in five years’ time.”
Dubai Square will open in four to five years' time on Creek Island, which will also house Creek Tower, taller than Burj Khalifa. The first phase of Creek Island is due to complete in the fourth quarter of this year and includes an Emaar-managed Vida Hotel, 3,000 square metres of public space, a marina and more than 8,600 apartments currently under construction.
Overall, Creek Harbour will contain 200,000 homes, 5,800 hotel rooms, 300,000 sq m of office space, 66,000 sq m of dedicated arts and cultural space and 700,000 sq m of parkland close to Ras Al Khor wildlife sanctuary, Emaar said on Tuesday.