Dubai attracts attention as luxury-lovers hunt for bargain
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Reuters
Oluşturulma Tarihi: Nisan 07, 2009 00:00
DUBAI - The homages to Pharaonic Egypt, ice rinks and shark-filled aquariums in Dubai's many malls still attract crowds, but retail in the Gulf Arab boomtown is looking fragile as luxury-lovers turn into bargain-hunters.
More than 40 malls in the region's capital of consumerism stock everything from cheap Chinese imports to designer goods: their extravagant features are designed to lure tourists who account for a significant chunk of business.
But as the global downturn caps consumer spending from Britain to India, retail - which generates about a third of Dubai's gross domestic product - is slowing markedly.
"This year will be the litmus test for retailers in the region," said Neil Tunbridge, head of retail services at Dubai-based consultancy GRMC Advisory Services.
"They will just be trying to get through the year with their operating systems intact." The summer months -- when fewer Western tourists visit the emirate to avoid stifling heat and unemployed white-collar expatriates are likely to pull their children out of schools to head home -- will be especially tough, analysts say.
Dubai lacks the oil revenues of neighboring Abu Dhabi, the main contributor to the federal budget.
Dubai's transformation from desert backwater to commercial hub has attracted retailers from around the world, including Spain's Inditex, owner of fashion chain Zara, British luxury retailer Harvey Nichols and Italian designer brand Fendi.
This spurred a real estate boom in the emirate that saw retail space increase at a dizzying rate. In 2008, leasable mall space rose 28 percent to 21.4 million square feet, according to a study by real estate services firm Jones Lang Lasalle. By the end of this year, that is expected to rise to 30 million square feet, said the study, published in February.
But as the global downturn caps consumer spending from Britain to India, retail - which generates about a third of Dubai's gross domestic product - is slowing markedly.
"This year will be the litmus test for retailers in the region," said Neil Tunbridge, head of retail services at Dubai-based consultancy GRMC Advisory Services.
"They will just be trying to get through the year with their operating systems intact." The summer months -- when fewer Western tourists visit the emirate to avoid stifling heat and unemployed white-collar expatriates are likely to pull their children out of schools to head home -- will be especially tough, analysts say.
Dubai lacks the oil revenues of neighboring Abu Dhabi, the main contributor to the federal budget.
Dubai's transformation from desert backwater to commercial hub has attracted retailers from around the world, including Spain's Inditex, owner of fashion chain Zara, British luxury retailer Harvey Nichols and Italian designer brand Fendi.
This spurred a real estate boom in the emirate that saw retail space increase at a dizzying rate. In 2008, leasable mall space rose 28 percent to 21.4 million square feet, according to a study by real estate services firm Jones Lang Lasalle. By the end of this year, that is expected to rise to 30 million square feet, said the study, published in February.