New Retail is Not Just About Shopping

Ian Gladwin FRICS is an international retail real estate expert, connected with MECS+R since 2000. As the Managing Director of Fulcrum Retail, he has particular expertise in the KSA, Kuwait and lower Gulf markets, and more recently in Africa.

Oman’s retail sector is recovering over the last 3 years, and analysts would concur that the sultanate’s trajectory is in pace with many of its GCC neighbours. New reports showed that the total wholesale and retail trade in Oman is showing positive signs again despite cautious consumer sentiment and sluggish market conditions. Creating new destination retail experiences will offer many more opportunities beyond just shopping, helping differentiate Oman’s retail experiences from its neighbours. With family experiences becoming a major impetus, more impressive mall complexes, grander retail malls, and bigger retail and entertainment concepts are being introduced throughout the GCC. Oman is no exception. Overall, a significant amount of retail space is being added to existing stock in the country, with a focus on Muscat and the capital area. But amid all the new additions, it is important to differentiate between what the market wants and what it needs. Ideally, a combination of more traditional souq-like experiences and a blend of modern and touristfocused retail should be the objective. Herein lies Oman’s potential. With the upcoming Mina Sultan Qaboos Waterfront redevelopment project, the sultanate can lead the way in destination retail development. The project aims to blend traditional Omani heritage and aesthetics with

IAN GLADWIN

MANAGING DIRECTOR FULCRUM INVESTMENT - RETAIL

modern technology, with a focus on sustainability and harmony with the environment. Combining old-style souk units with educational and leisure facilities in such a space would provide a truly unique destination retail experience for tourists and residents alike.

The influx of new brands to the market over the past 15 years enabled the development of fashion avenues and bijoux retail destinations in malls with over 60,000 sqm of Gross Leasable Area (GLA). But the market can only absorb a certain amount of supply before the law of diminishing returns starts to affect the success of such destination experiences and the value of such projects. A fuller and better understanding of the purchasing power of shoppers will help ensure future success, particularly in challenging conditions. Understanding what price points brands should enter in new malls to maintain operational success is also key. This applies not only in challenging conditions but in planning for similar conditions in the future. As shoppers become more discerning about prices, spending and value, brands become cautious about margins, and this impacts the entire retail sector. Wellpriced products and sustainable rents will allow retailers to make a positive margin, survive and thrive in Oman’s changing retail landscape. This is particularly true at a time when the danger of building too big and too much becomes apparent in more sensitive market conditions. Retail development is considerable in Oman. But more considerable are the opportunities it offers to truly diversify and differentiate it from its GCC neighbours.