Interview: Yousef Mohammed Rasool Khoory
What have been some of the key enablers that have driven the retail sector?
YOUSEF MOHAMMED RASOOL KHOORY: Abu Dhabi’s retail sector has experienced tremendous growth over the past few years, primarily as a result of increased visitor numbers and stable economic development spurred by government investment, which has also resulted in increased employment. The consistency of the sector is the result of the prudent and conservative approach taken with regards to the emirate’s economic development – as outlined in the Abu Dhabi Economic Vision 2030 strategy. Going back to 2008, this cautious approach has resulted in the emirate emerging relatively unscathed from the credit crisis, which continues to benefit retailers today.
Recently, the addition of even more prime retail space, through the introduction of several new malls, has helped diversify Abu Dhabi’s product offering. This makes the emirate much more competitive and reduces the number of resident shoppers who opt to travel to Dubai. Additionally, Abu Dhabi has succeeded in marketing itself internationally as a global retail destination. Granted Dubai is still relatively more well known, but it is fair to say that Abu Dhabi is closing that gap rather quickly.
The market is not without its challenges. Lower oil prices have had an indirect impact on the retail sector, and the appreciation of the US dollar has resulted in business having slowed somewhat in 2015. However, long-term growth remains quite favourable, as Abu Dhabi continues to offer a secure business environment in a region that has witnessed significant unrest in recent years. Moreover, the emirate is highly committed to its economic development strategy, which will serve as the foundation for what seem to be very healthy growth projections for the foreseeable future. The retail sector supports industries like tourism and is continually maturing, although there is still great room for further development.
How is the maturity and the development of the market being encouraged?
KHOORY: The government is investing heavily in infrastructure, most notably with the construction of a new airport terminal that will ensure the emirate can accommodate the growing number of visitors arriving each year. Additionally, the government is determined to increase the number of cultural sites on offer with the opening of the Louvre Abu Dhabi in 2016 and several other major museum projects in the not-too-distant future. As the population continues to grow, they have also identified a need to increase the number of family-friendly facilities and activities for children. We have seen considerable developments on Yas Island in this regard.
To what extent have these developments impacted the interest level of global retailers?
KHOORY: These developments are not lost on global retailers, and their interest in penetrating the market remains extremely high. It’s a well-known fact that the UAE is saturated with a wide variety of different brands. Dubai has retained its position as the second most important shopping destination in the world, with an international brand representation rate of over 55%, just behind London. Interestingly, Abu Dhabi ranked third for new retail entrants in 2015. A significant increase in capital investment and the opening of new shopping malls are the predominant forces behind this growth. Moreover, global retailers view the UAE as a destination of choice when entering the region for the first time, and it serves as an excellent staging point for regional expansion.
Despite rising competition, there is still ample room for further brand representation in Abu Dhabi, at all levels of the market, including the luxury segment. This is a pivotal time for retail, as global brands look to find partners who have the distribution, diversity and experience to help them expand here.
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