UK #1, Dubai #2 for Brands

11 May 2010 - Dubai: The UAE's position as a retail hub makes it the second most attractive venue for international retailers, according to a recent report by CB Richard Ellis.

Dubai: The UAE's position as a retail hub makes it the second most attractive venue for international retailers, according to a recent report by CB Richard Ellis.

The UK maintained its number one position for the third year running with 58 per cent of brands in the survey present in the country.

In second place was the UAE, with 54 per cent and the US was third with 51 per cent, the report said.

Over the past year, the UAE climbed from third to second place with an 8.2 per cent year-on-year increase.

The survey included 294 retail brands in 69 countries.

"Out of all the brands surveyed, 54 per cent were prevalent in the UAE," CB Richard Ellis Middle East senior retail consultant Michael Leighton said.

"However, that means that there is 46 per cent which is not. There's still a huge potential for new brands to come into the region."

Leighton said one of the main factors behind the increased presence of international retail outlets in the UAE was the opening of two big malls: Dubai Mall and Mirdif City Centre.

"Major new shopping centres are often the trigger for international retailers to open their first store in a market," he said.

"The last quarter (for example) saw Bloomingdales and Crate & Barrel, two of America's favourite brands, open in Dubai."

The attractive franchise model in the UAE also played its part in encouraging international brands to set up shop here.

"The franchise model in the UAE which allows for a maximum turnover provides brands an opportunity to enter the region at a lower cost.

"A lot of brands outside the region, especially in the US, are suffering and so are looking to expand outside their region," Leighton said.

However this onslaught of franchise created more competition for smaller independent stores.

"Brands in the UAE are controlled by franchises with multiple retail outlets," said DTZ retail services head of retail Andrew Goodwin.

"There is a small number of retailers in control of a large number of shops, which causes concern for innovation.

"The competitiveness in terms of rent means boutique stores are being penalised."

The report noted significant shifts in ranking of global retail cities in the past year, with markets such as Beijing, Shanghai and Moscow making their way into the top ten and Riyadh, Jeddah and Kuwait moving into the top 20 of the most penetrated international retail markets.

Middle Eastern cities dominated the mid-range fashion sector with Dubai at the top.

Kuwait, Riyadh, Jeddah and Abu Dhabi featured in the top 10.

"While there is very expensive taste in the UAE, placing it third behind Hong Kong and London, the mid-range sector is driven by the large expatriate population in Dubai," Leighton said.

According to industry experts, the retail focus was likely to shift towards Abu Dhabi.

"Abu Dhabi is currently undersupplied and there are a lot of malls in the pipeline," said Goodwin.

"However, many existing and proposed malls are relatively small in comparison to Dubai.

"Abu Dhabi is still lacking as a regional destination which is going to compete with the competitiveness of Dubai.

Source: Gulf News -


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