Dubai: What does the ‘City of Gold’ need next? An ‘Extension’.
That’s exactly what Dubai has got for itself with the ‘Gold Souk Extension’, as the Middle East’s most influential gold and jewellery market transforms into a bigger hub for all things precious. And in the process create new categories of shoppers, both within the country and outside.
Because the 1.18 million square feet development located in a prime spot on Deira Corniche offers something more than a collection of new stores. It comes as a complete package of office and residential buildings, set into individual ‘districts’, and anchored around the stores. Think of it as a self-sufficient, fully integrated ‘city’ for the gold and precious metals trade, and you will be on the right track.
“The historic significance of this area (Deira Gold Souq) has been uplifted to provide an enriched experience while accommodating the increasing number of visitors,” said Issam Galadari, Director and CEO of Ithra Dubai, which is spearheading the transformation of an entire area around the Corniche.
It will be one of Dubai’s top cultural attractions and the world’s destination for jewellery, revitalising Dubai’s moniker: the ‘City of Gold’.
Big names from Saudi Arabia, Pakistan
As of now, more than 50 jewellery retailers opened during the soft launch phase, out of the 295 stores. Several retailers have taken multiple stores as they plan to target a wider shopper demographic than what they - and Dubai – have been used to. One of Pakistan’s biggest jewellery houses, Haneef, will have a base at the Extension, while leading glitter retailers from Saudi Arabia – Al Rumaizen, Zayan Gold, Al Anwar and Al Abadi – too will have representation there. Hong Kong’s Coronet adds to the international flavour.
A different shopper profile
“The Gold Souk Extension will target a more international clientele than those who frequent jewellery stores elsewhere in the city,” said Shamlal Ahamed, Director of International Operations at Malabar Gold & Diamonds, which is having three stores with a combined 8,000 square feet at the new hub as well an office building to serve as an international office for all of its non-India operations. “Arabs from North Africa – from Egypt or Morocco – and Nigerians could be among the new shoppers that the sector needs. Retailers are launching new store concepts and collections targeted at these prospects.
The resident profile of Dubai has changed significantly in these two years – and the launch of Gold Souk Extension gives the decades-old gold trade here to try something new, something radical.
Shoppers from the West could provide another big breakthrough for the new Souk. “Why would anyone want to pay 20 per cent as VAT on gold or diamond jewellery in the UK when a visitor from that country can get a full VAT refund here?” said a retailer. “Dubai has got significant advantages when it comes to VAT rates (of 5 per cent and refundable for visitors).
“The next logical step for Dubai is to emerge as a strong contender in the global diamond trade too, which opens up more Western markets for collections designed or made here.” (UAE will sign a CEPA (Comprehensive Economic Partnership Agreement) with Israel soon, which will further smoothen Dubai’s diamond hub prospects. The one with India, which went live on May 1, enhanced prospects for the gold trade.)
Original vs Ext.
Dubai’s original Gold Souq still remains one of the most visited retail locations in the city, more so when gold prices tend to drop. It remains the beating heart of Dubai’s gold trade, honed over the decades. It has overcome downturns, two Gulf Wars, the COVID-19, and gold prices twice crossing $2,000 an ounce in the last decade.
“This is the legacy side of the Dubai gold business, where 50-60 per cent of shoppers represent repeat customers,” said Anil Dhanak of Kanz Jewels, which owns multiple stores in the original Souq. “For some retailers, the percentage of repeat customers could be higher. But for any trade to grow, there is a need to attract new shoppers, new generations. If not for gold itself, then diamonds or any precious stone. (Kanz will be opening its location at the Extension within the next three- to four months.)
The Gold Souq Ext. is done in a way that is truly 21st century retail – and good enough to challenge online shopping too.
According to industry sources, rentals for the stores in the prominent spots at the new location are more or less on par with those at the Gold Centre in the original. The difference is that jewellers are taking bigger areas in the Extension. (One of Malabar’s stores will be 5,000 square feet, making it the retailer’s biggest.)
Old and new shining alike
As for Laila Suhail, Board Member and Chairperson – Marketing – Dubai Jewellery Group, the brand new and the historical will together raise Dubai’s profile as the place to shop, trade, invest or try out the best of collections, the most wondrous of jewellery designs.
Sitting in front of the iconic Dubai Gold Souq and against the backdrop of the Deira Creek, Gold Souk Extension will offer something new and added facilities which will further enhance the Dubai Gold Souk experience.
That sure sums up what the future will be for the City of Gold.