Retail Leasing in Mixed-Use Developments

Le Carrousel Mall, Rabat, Morocco (IMKAN)

During her nine-year tenure in UAE, Luann has worked for MAF & IMKAN Properties where she managed business and delivery development, and retail leasing initiatives. A proud native of Brooklyn, NY with over 20 years of experience in real estate development, she has led and executed growth plans for Fortune 500 companies (Macy’s, McDonald’s, Yum & Clearview Cinemas).

LUANN PARKER

Real Estate Consultant

The UAE retail market remains robust despite a contraction in total retail sales volume in 2020. Accordingly, the Economist Intelligence Unit forecasts 2.6% annual growth over the next three years. Macro factors contributing to this are the country’s highest vaccination rate globally, labour law reforms, new flexible visa options and a revised work week to align with the western world. Moreover, the UAE’s economy is significantly fueled by SMEs which account for over 85% of its businesses. In 2021, 69% more business licenses were issued than the year prior. All the above has paved the way for real estate leasing in mixed-use projects to be a more productive and unique proposition. PAST

The origins of mixed-use typology can be traced back to medieval times in ancient Rome for example with shops and apartments co-existing in multi-unit structures. Fast forward, this concept advanced globally at different rates and scales but reached an impressive inflexion point as land became scarce and cities quickly grew crowded as a result of massive migrations from the outlying communities. However, the UAE and surrounding countries evolved in this respect at a much slower pace given the vast greenfield area available to be developed. As a very young nation, UAE chartered an overall plan for base-level municipal and infrastructure planning to ensure the future-proofing of such developments. By the 1990s, mixed-use projects were primarily low-rise residential or hybrid (residential and office) with relatively small areas of retail space for lease. The typical tenants found in these complexes were daily needs/services such as supermarkets, pharmacies and dry cleaners. Sub-par F&B locations existed mostly with fair to average aesthetics and operations. By 2007, an unprecedented rise in residential construction occurred mostly in Dubai. Most projects lacked a complete synergy between the residential/office and retail

components to provide for a 360 community. Exceptions to this model included the newly created districts like JLT, Downtown, Business Bay, and DIFC. PRESENT

Over the last decade, the definition of mixed-use development has further evolved to be an urban plan consisting of one or more elements including residential, commercial, cultural, recreational, and institutional uses. This has been driven by increased standards of developers to enact placemaking principles which elevated their quality of design with the addition of more lifestyle amenities to better reflect the character of the main project’s principles. In parallel, COVID-19 has challenged developers to attract retail tenancies that not only have improved standards of excellence, variety and customer experience, but that also have meaning, something of more importance to customers in response to the pandemic. As a result of the above and heightened customer hesitation to visit brick & mortar retail, developers have sought to provide retail mixes that residents and visitors would prefer to avail rather than visiting traditional shopping malls.

Accordingly, several developers in the UAE and the region have successfully curated truly unique and diverse retail tenant mixes in their mixed-use developments. IMKAN Properties redeveloped Sheikha Fatima Park to be Abu Dhabi’s first urban lifestyle park with something for everyone. Pet lovers have the Emirate’s first dog park. Fitness enthusiasts crank it up at CRANK Fitness. Infants/toddlers enjoy the best sustainably designed nursery with Reggio Emilia taught principles. A mix of F&B primarily created by start-ups have sole locations in the park. The roster doesn’t stop there as the fundamental offering of a picturesque outdoor setting provides premium yet affordable choices in quality and healthy living. In Rabat, Morocco, IMKAN’s Le Carrousel mixed-use masterplan currently under construction, promises to deliver an unparalleled mix of retail, leisure and F&B. A cinema with live jazz entertainment, retail concepts new to Morocco and F&B unique to Rabat will bring diverse offerings to this country. Other local examples can be seen with developers such as ALDAR Mamsha Al Saadiyat, Water’s Edge, EMAAR Burj Downtown, MERAAS Citywalk, Bluewaters, and ALJADA Arada. These types of communities enable residents, workers, and visitors to seamlessly integrate their work, home, and social lives in a more purposeful differentiated way.

Sheikha Fatima Bint Mubarak Park Abu Dhabi, UAE (IMKAN)

FUTURE

With over 55% of the world’s population living in urban spaces, the future definition of mixed-use development as it relates to retail leasing will further evolve. The growth in e-commerce is undeniably revolutionizing the playing field of bricks and mortar retail whose prevalence will continue in a region of weather seasonality. The digital space will shape or arguably dictate the retail space by bridging social, media, technology and experience into emerging, evolving or transformational concepts. This new generation of retail concepts will give even deeper meaning and variety to mixed-use developments which is exactly what customers want. But stressing all of this is a business environment positively and progressively shaped by the UAE government. The outlook is vast, exciting, and limitless for mixed-use development communities.