Tourism growth driving demand for more malls in the UAE

May 11, 2017 5:32 pm

According to Dubai Chamber, Dubai is estimated to have around 717,000 square metres of new retail space by 2018, while Abu Dhabi is expected to see a supply of 467,000 sq. meters of new space over the same period.

Demand for retail space is growing along with the spending power of the residents, anticipated growth in tourism and a growing expatriate population with high incomes.


JLL said there was around a quarter of a million squares of gross leasable area (GLA) added in Dubai last year, marking the highest expansion rate since 2010.

This brought total GLA to 3.4 million sqm by the end of 2016. No major change in supply kept the total GLA in Abu Dhabi stable at 2.6 million sqm.

Dubai and Abu Dhabi are expected to see GLA additions of 717,000 sqm and 467,000 sqm by next year.

Master developer Nakheel has awarded a construction contract to build Deira Mall – Dubai’s biggest shopping, dining and entertainment destination in terms of retail space – with a total investment of AED6.1 billion.

Nakheel has appointed United Engineering Construction LLC to build the mall, under a contract valued at AED4.2 billion. Construction will begin in Q3 this year, with completion in 2020. With four million square feet of leasable area, Deira Mall will be the biggest in Dubai in terms of shop space.

Abu Dhabi

Research by Brunswick Insight showed that more than 70 per cent of consumers in Abu Dhabi visit the mall at least once a week, reflecting the central role that malls play in people’s everyday lives.

The report said that two thirds of consumers believe that shopping and dining options have improved considerably over the past five years, and the same number choose to stay and shop in Abu Dhabi rather than travelling elsewhere.

Abu Dhabi is home to some 2.7 million people, according to government statistics.

Bassam Saleh, Marketing Manager for Bawadi Mall said: “With the growth in population, Abu Dhabi has experienced a massive increase in retail space. As such, mall and other retail centres have started to make an effort to reposition their facilities to become more attractive to both tenants and retailers. It is important that supply and demand must be considered when opening physical locations in the future.”

Market outlook

Non-store retailing, mainly in the form of e-commerce activity, accounted for only 3 per cent of all sales in the UAE. However, momentum is gaining within this market segment, which is projected to see double-digit growth in the medium term.

Demand for retail space is projected to see a moderate increase in the medium term, which may potentially lead to market saturation.


Hina Latif
By Hina Latif
Hina Latif has over six years of media and publishing experience under her belt, spanning multiple magazines and a newspaper in the UAE. She studied creative writing at the University of Oxford and has a Master’s degree in Journalism.