Community retail centres power ahead

Community retail centres are designed to serve several residential neighbourhoods covering between 2,000 to 8,000 households. They consist of 10,000 to 40,000 square feet and provide daily and weekly shopping, personal service needs, a few comparative goods shopping and other services such as banks and money exchangers.

The importance of such centres has grown substantially, with a number of new expat districts and traditional Emirati neighbourhoods hosting some extremely popular ones. A survey conducted in 2009 by SouqExtra, a community centre operator, indicated that customers were opting to shop at convenient local centres. Around 40 per cent said they would shop at the nearest major convenience store.

As such, the demand for these centres is on the rise and retailers have responded with a number of new concepts. SouqExtra, which evolved in 2009 as a lifestyle concept, responded to the daily needs of communities.

All SouqExtra centres have a uniform design and their planned projects also include full-fledged gyms. With sturdy investors such as the Lootah Group, Emirates Post Group, National Bonds Corporation, Bonyan Holding and the Abbasi Group, the company is already operating five centres.

Growing brand

Another growing brand is Aswaaq, which operates small and medium sized community retail centres in strategic residential areas such as Nadd Al Hamar, Al Mizhar, Sufouh, Umm Suqeim, Al Rigga, Al Warqaa and Mirdif. They are anchored by a supermarket and complemented by a range of shops in a street market environment.

Apart from these specialists retailers, community retail centres have also been set up by property developers such as Emaar in locations such as Arabian Ranches, Greens, Lakes, Meadows and Springs. The basic concept remains similar with an anchor supermarket.

These centres are usually between 10,000 and 40,000 square feet and the supermarkets are typically Spinney's or Le Marche which target the expatriate community. Additional services include pet shops, bookshops, travel agents and photo shops.

While most of Emaar's developments already include such community centres, Nakheel is now planning to set up the same within its projects. Arif and Bintoak Consulting Architects and Engineers have been recently given the design and supervision contract for retail facilities at Jumeirah Park and Discovery Gardens.

Common theme

The Jumeirah Park retail centre will provide 50,000 square feet, while the one at Discovery Gardens will offer 140,000 square feet. Construction on both is likely to start in the first-half of 2012.

The common theme in all these centres is a supermarket as an anchor, which brings in the crowds, who may also need to use the other services on offer. Supermarkets such as Geant Easy, Le Marche, Spinney's, Choithrams, Al Maya, Lulu Express and Carrefour Market are typically smaller versions of their hypermarket counterparts.

Of these, Carrefour Market and Lulu Express have been expanding aggressively. The Emke Group plans to expand these Express stores with an average size of around 20,000 square feet to cater to the growing demand from suburbs and gated communities.

These expansion plans do not seem surprising, given the fact that consumers are getting savvier and more health conscious, preferring fresh, local and organic produce. Shopping preferences have also been changing post-recession, with both bulk buyers and shopaholics becoming more conscious about their spending habits.

Loyalty to hair salons, opticians and dry cleaners and friendships with familiar service staff is another factor that draws in the crowds. As such, whether in the form of convenience stores or community retail centres, service-area oriented small format retail are the way forward.

The writer is head of valuations and research at Chesterton International.