Retail

Driven by healthy population growth, world-leading income per capita, and steady demand for high-end retail space, Abu Dhabi’s retail industry has undergone years of strong expansion, leading to an influx of new project completions between 2013 and 2015. The industry, like many others, is beginning to feel the pains of reduced economic expansion, as lower global oil prices and the strengthening US dollar are expected to impact spending and tourism growth in the coming years. At the same time, two large-scale “super-regional” malls, on Al Maryah Island and Al Reem Island, are slated to open in 2018, intensifying competition and weighing on retail rents. Increased competition has nonetheless spurred innovation in the sector. Developers are increasingly linking retail developments to tourist attractions and residential complexes, and have sought to incorporate long-term urban planning considerations such as creating free public spaces and community centres. The grocery segment meanwhile is set to kick-start growth in the UAE’s nascent e-commerce industry, offering new opportunities for investment and expansion.