Dubai: The neighbourhood mall brand, Oasis Centre, has picked up the management rights for an existing shopping centre in Riyadh, its first in a Tier-A city in Saudi Arabia.
All of the other four projects it is working on now are in the kingdom’s secondary cities, while the one which opened earlier in the year is also in such a location.
The Riyadh development is scheduled to open in another four months and will do so with an extensively revamped retailer line-up.
“While it was never the intention to have an Oasis Centre in the kingdom’s metropolises, where the retail sector is quite developed unlike in Tier-B and C locations, the Riyadh project fell in our lap so to speak,” said Neelesh Bhatnagar, director of Landmark Group’s operations in Saudi Arabia. Landmark owns the Oasis Centre concept.
“It was an existing mall of 600,000 square feet and been operating for 12 years; but we found that cities such as Riyadh have lots of malls and many are struggling and not producing the desired results for the property owners. It was thus an opportunity to get the Oasis Centre badge into a main-line city and at the same time stay true to our neighbourhood/community offering.”
The makeover is going on and will be extensive, fright from the facia to the zoning of areas within the mall. Post the opening, it will continue to operate the Carrefour supermarket, but as much as 70 per cent of the retail mix will be new. Landmark Group’s in-house brands will be there and so will some of Al Shaya Group’s, the Kuwaiti entity which is the franchise holder for brands such as Next and Debenhams, among others.
According to Mat Green, head of research and consultancy at CBRE Middle East: “As the Saudi market has expanded in recent years, we have seen a growing divergence emerge between the performance of new and old stock.
“Newer malls have tended to be far larger in size, offering a wider range of facilities and brands to the consumer.
“As they have leased up and become accepted by the market they have typically cannibalised the existing market share of smaller centres around them.
“This in turn has negatively impacted footfall and retail sales volume, and ultimately led to deflation of occupancy and rental rates. We have seen similar trends in other regional markets such as Dubai, with the advent of super-regional and mega-sized malls.”
Bhatnagar believes strongly that with the correct repositioning the Riyadh mall can start giving the right numbers. “Given the community theme, we expect the conversion rates - of sales per visitor - to push higher,” he said.
Other Gulf markets too are seeing the Oasis Centre push through. In Oman it is doubling the area and Kuwait looks a strong possibility for an entry. Iraq, the northern parts in particular, is also a strong prospect.
