Dubai must increase retail spend per capita to meet shopping centre growth

Dubai will need to more than double its annual per capita retail spend to US$ 8,400 by 2010, from the current US$ 3,500 required to make retail space viable, if it is to sustain its massive increase in retail Gross Leasable Area (GLA), according to Colliers International - one of the top three global property service consultants.
Dubai is experiencing a retail boom and forecasts predict a 209 per cent growth in retail space to 4.25 million m² by the end of the decade, , which will see some of the world's most extravagant shopping centres come online. This amount of space will require a spending of US$8,400 per capita to make it viable, although this spending requirement declines by 34 percent, when visitor spending is taken into consideration.

According to Colliers International's inaugural GCC Retail Report, the required spend figure for Dubai is not excessive when looking at other major markets. For example, in the United States the comparative figure is US$ 12,000 per annuN, while for Europe it is US$ 8,000. Fortunately for the city's retailers, Dubai is widely regarded as the tourist hub of the Middle East, with 15 million visitors a year targeted by the Dubai Government to travel to the emirate by 2012. According to ACNielsen, shopping centres currently derive 55 per cent of revenue from tourist visitors, with this figure expected to increase proportionately, reducing the necessary spend for the resident population.

According to Colliers International, the Gulf Cooperation Council's (GCC) retail real estate market is the fastest growing in the world, with more than 16.35 million m² of GLA expected to be completed by 2010. This increase represents a 565 per cent growth in the available GLA in the region since 2000.In 2010, Abu Dhabi will have 0.87 m² of GLA per capita - which is 37 per cent of the supply in Dubai, potentially requiring an annual per capita spend of US$ 4,900.