With the economy continuing to expand, retailers in Ras Al Khaimah (RAK) are hoping for a period of sustained growth, benefitting from rising local incomes and an increasing number of tourists, but they are also mindful of the competition from neighbouring emirates.
There has been steady growth in RAK’s retail sector, with new malls and high-street outlets opening on a regular basis over the past few years. This growth has been supported by a solid domestic economy, which the government forecasts will expand by around 8% this year, the same figure recorded in 2011.
Despite this growth, the market has not yet reached its saturation point. According to some estimates, the gross leaseable area (GLA) for RAK’s retail sector is set to hit almost 200,000 sq metres by 2015, more than double the figure in 2010. This would give the emirate a per-capita GLA of 0.736 sq metres, well below Dubai and less than half the projected figure for Abu Dhabi for 2015, which is expected to have almost 1.7 sq metres of retail space per person. By comparison, the US has a per-capita GLA of around 1 sq metre, while in the EU the total is just 0.231.
RAK Mall, the latest entry into the retail sector, was developed by the Abu Dhabi-based Lulu International Group. The $110m mall, which opened in April 2012, has a total area of 93,000 sq metres and is home to a Lulu hypermarket, a food court, an entertainment zone including an ice rink, and local and foreign brand-name retailers.
In mid-March, RAK Properties, the state-backed developer and operator, announced it had appointed real estate consultancy Colliers International to manage the retail development and leasing operations for both its Julphar Towers office and residential complex and the Mina Al Arab coastal residential and resort project.
Among the tasks assigned to Colliers will be attracting major international and regional retail brands. Jewellery, food and beverage, fast-moving consumer goods, fashion and consumer electronics have all been identified as areas that will be targeted.
While the local sector is performing well, it faces a number of challenges going forward. The sheer size and variety on offer in Dubai and Abu Dhabi is perhaps the most significant factor. While many brand-name outlets have a presence in RAK, others do not, opting instead to focus on these larger emirates. This is in part due to the fact that many who live in RAK actually work in Dubai; commuting is straightforward and those who spend their days in Dubai also shop there.
While at least some residents may continue to do their shopping elsewhere, RAK’s retail sector will be one of the beneficiaries of an expected surge in tourism over the next few years. State agencies estimate that tourism arrivals will hit 1.2m by 2013, a figure that is expected to climb after the $1bn theme park, sports and real estate project, to be developed in partnership with Spanish football club Real Madrid, opens at the beginning of 2015.