Retail is an increasingly important part of economies in the Gulf, with retail space accounting for around 6m square metres of all commercial property; up from only 1m square metres in the early 1990s. While Dubai leads the way in the sector, Qatar is is also a major player.
In terms of retail density, the capital city of Doha is near the top of the list, with 600 to 700 square metres of retail space per 1000 people, a number that is expected to increase in the years to come with several large-scale projects anticipated to add 600,000 square metres to the market.
These include the $2.5bn Pearl-Qatar development, an artificial island being developed off of Doha's West Bay Lagoon district. The Pearl is one of the largest projects in the region and will offer 200,000 square metres of retail space.
Other GCC member are looking to enter the Qatari market too, an example being Abu Dhabi's Emke Group which is developing a new shopping mall at Al Khor. Estimated to cost about $138m, it is expected to be completed in the next 18 months.
GDP in Qatar currently sits at over $52bn and with current government initiatives, the figure is projected to grow to more than $70bn by 2008. Qatar's per capita income, which is one of the highest in the world, is projected to rise to more than $68,000 by 2008 according to data released by the Qatar National Bank.
With growing spending power, Qataris have shown more and more interest in luxury purchases. Building on that, projects like the Pearl aim to bring in up-market brand names and international groups to establish a presence in Qatar and tap into this booming spending capacity.
Like the Pearl, most retail projects coming online across the region are in the luxury goods and higher-end markets. Lagoona Mall, being developed by Darwish Holding in Doha's prestigious West Bay Lagoon, will have near 75,000 square metres targeted toward high-end clients.
To cater to a small population with money to burn, many companies are choosing to focus on low-volume, high-value products for better profit margins.
"Qataris want exclusivity above all else," Nazar Najarian, general manager of luxury retailer Modern Home, told OBG. "Price is important, as the market generally expects the more expensive items, but exclusivity is the real key - regardless of price."
With the average spending power of Qataris on the rise and increasing numbers of executive expatriates coming to Qatar, with generally higher than average disposable incomes, retailers and mall owners are looking at bumper potential earnings. And, it is not just those directly involved with the sector that are set to benefit as the growth of retail and increased competition are being seen as very healthy for the whole economy.