Oman’s retail market is largely split between shopping malls and relatively small roadside shops or ground floor retail units. While shopping malls are relative newcomers, the segment is growing quickly both within the capital area and in other, less-populated cities. The two largest shopping malls in Oman are Muscat City Centre and the recently opened Muscat Grand Mall.
Follow The Leader
The property consultancy Cluttons reported in April 2012 that City Centre leads the market in terms of both rental value and footfall. Opening in 2001, the mall initially provided about 33,000 sq metres of retail space; however, this was later increased with expansion projects totalling OR22.5m ($58.6m). The shopping mall now covers over 60,000 sq metres of gross leasable area (GLA) and contains 147 retail units. Majid Al Futtaim Properties, a subsidiary of Dubai-based Majid Al Futtaim Holding, is City Centre’s developer.
The entrance of Grand Mall in 2012 has altered Oman’s shopping mall segment. The mall is part of the Al Tilal Complex, a mixed-use development in Al Khuwair, which is made up of 180 apartments, 110 serviced apartments and 40,000 sq metres of office space, according to recent data provided by Cluttons. The development’s second phase may include a 5-star hotel. Grand Mall itself offers over 60,000 sq metres of retail space and 160 retail shops, according to Cluttons’ data. The mall is anchored by a Carrefour Express.
Continued Expansion
While the pace of leasing retail units at Grand Mall has not been rapid, the mall continues to sign contracts with new retailers. For example, in mid-2012 City Cinemas, a subsidiary of the Oman Arab Cinema Company, opened a multiplex cinema at the mall. This was soon followed by the opening of Sharaf DG, a large electronics outlet and part of the Dubai-headquartered Sharaf Group. The retailer has leased a 34,300-sq-metre unit—the largest space for an electronics outlet in the country.
With the addition of Grand Mall, the retail market is generally becoming more competitive. However, local retailers remain upbeat. “Without competition the market becomes stagnant,” Ajay Ganti, the CEO of SARCO, Al Seeb Technical Establishment, an electronics retailer, said. “The more retail space that opens, the more employment will increase and the more disposable income will go to consumer spending.”
Smaller Offerings
Majid Al Futtaim Properties’ Qurum City Centre mall is a smaller version of Muscat City Centre and opened in 2008. The mall has more than 20,000 sq metres of GLA and over 75 retail units. Built relatively near Muscat City Centre in the district of Al Seeb, Markaz Al Bahja Shopping Mall, has 19,000 sq metres of GLA. Zakher Mall and the Al Araimi Complex provide around 17,000 sq metres and 12,000 sq metres of retail space, respectively.
The sultanate’s shopping mall segment is expanding beyond the capital area. For example, plans to build a mall as part of a mixed-used development in Sur in the north-eastern region of Al Sharqiya were officially announced in mid-2012.
Known as Sur Gate, the development’s facilities are expected to include a shopping mall offering over 58,000 sq metres of space and an 11,812-sq-metre hypermarket. These shopping facilities will be combined with residences, as well as a business centre (20,127 sq metres) and a commercial area (25,670 sq metres), according to its managing firm, the Public Establishment for Industrial Estates.
More retail space is being developed in the southern city of Salalah, where Al Reef Real Estate Company, a subsidiary of Kuwait’s United Real Estate Company, is building a mixed-use development known as Salalah World. With full handover expected in mid-2012, the development’s retail space will be made up of a shopping mall, a multi-story hypermarket and restaurants and cafes. A 9000-sq-metre Carrefour will be one of Salalah World’s lead tenants. The development will also include a landscaped theme park, a multiplex cinema, bowling alleys, billiard rooms, apartments and a new hotel, according to the developer.
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