UAE RETAIL SECTOR TO GROW BY 5%, REACH AED 200 BILLION BY 2017
- June 9, 2016
- Posted by: RKonnect
- Category: Business & Economy, Retail & Manufacturing
UAE continues to maintain its position in the top 10 rankings for new retail development globally. Ranked seventh in A.T. Kearney’s Global Retail Development Index (GRDI), UAE’s estimated retail sales totalled $69 billion (AED 253 billion) in 2015. Despite falling oil prices, UAE’s retail sector grew at 6 per cent in 2015 and is expected to grow at CAGR of 5 per cent in 2016-17.
Dubai Chamber of Commerce and Industry expects UAE’ retailing sector to reach USD 54.4 billion (AED 200 billion) by 2017 as the country recorded highest sales per capita of USD 7,159 (AED 26,201) in the GCC region signalling that UAE is still an attractive and low-risk option for retailers compared to other countries. In terms of GDP contribution, the retail trade sector accounts for 11 per cent of UAE GDP while 30 per cent of Dubai’s GDP.
UAE remains the most preferred destination for new investments by local as well as foreign investors. Recently, the Majid Al Futtaim Group completed a new shopping mall in Dubai (Me’aisem City Centre) and City Walk (Phase 2) and Meraas Group announced a new outlet mall in Jebel Ali, Dubai. Emaar Malls Group also oversaw a total of 124 million visitors in 2015, a 9% increase from 2014 out which 80 million people visited the Dubai Mall alone, the highest by any shopping mall in the world.
In May 2016, Dubai Properties announced Marasi Business Bay Project, a new waterfront district will be developed that will feature a 12 Km promenade, 100 retail units, Food and Beverage (F&B) outlets and a floating beach club in addition to wide range of leisure and entertainment facilities. When completed, the project will boost Dubai’s retail and hospitality sectors considerably.
Impact on UAE & Dubai Economy
Consumer spending in UAE is expected to rise and growth rates are projected to stablise on account of out favorable demographic conditions and increased tourism in UAE. Additionally, EXPO 2020 project which is expected to attract more than 25 million visitors from October 2020 to April 2021 in Dubai will be crucial in ensuring that the retail sector grows at a healthy rate in 2016-21.
Investment Opportunities in UAE
UAE leads the GCC region in terms of retail development and is an important pillar in economic diversification strategy of the country. The fresh rankings will boost investor confidence and ensure that UAE’s retail sector continues to attract investments.