Bigger is not necessarily better

One of the most engaging aspects of working and living in the Middle East and being part of a rapidly expanding and diversifying real estate culture, is the level of commitment and obvious investment that is being placed in the many large-scale developments throughout nearly all of the major cities. There are myriad examples of design, shape, land-use and function, and almost all without exception claim a moniker of being world class from at least one of the above.

The premier showcase of these developments is the Dubai Cityscape conference, which acts annually, not only as a springboard for those developments which have recently moved from concept to reality, but also those that have a more long term development process. In recent years there have been many developments and projects vying for the top spot of the best or most luxurious, where size more often than not is the principle feature; coincidentally many of these developments also happen to be in Dubai.

When it comes to retail sector it has not been too difficult to sense that the same size-orientated, conceptual thought process has similarly been at the forefront of developmental design, where over the last five years there has been an abundance of announcements for large malls. Many of them, however, are still at the preliminary construction phase and whilst there is no denying their overall importance to the regional retail markets, much will have changed before they finally open their doors.

Impact

Consequently, as only a few of these super-regional malls have been delivered to the market, there is much more to bear in mind when considering their overall success in the long term, other than their size.

There is an often used phrase that states 'the key to retail is in the detail' and nothing could be more applicable in terms of what the retail sector now needs, as to how the industry should move forward with continued credibility. In essence the industry requires a detailed plan of how to best execute the completion of the next generation of retail malls, where size is not necessarily the sole point of difference.

As a result, the long term credibility for the Middle Eastern retail markets lies not with the continued development of very large ubiquitous mega-malls, but with those developers that can execute a well thought through, customer-centric model that caters to a specific shopper audience and catchments area.

Typical development models show that as a market matures, so do the customers and their shopping habits, over time they will become increasingly knowledgeable on price points, design, brand saturation and drive times. Their willingness to aimlessly wander the corridors of large malls hunting for interesting and eye-catching windows will wane and gradually they will visit the malls that are more accessible, are manageable in size and that possess a good and relevant merchandise mix.

In essence therefore, whilst the influx of those larger malls will shape the next, immediate phase of market maturity throughout the region, their size alone will not necessarily win them the levels of market share that they are aiming for. Instead the malls that open on time, with a full complement of stores that offer competitive price points and the brands that cater directly to the consumers' requirements will be those that secure long term market recognition. It is the plans for malls and retail developments such as this that we will hopefully be seeing more of at events such as Cityscape.

- The writer is head of GRMC Retail Services, Dubai.