REVENUE IMPACTING OPPORTUNITIES IN THE SHOPPING CENTRE MARKET

Introduction:

Shopping centres are becoming increasingly popular as these centres serve as bustling hubs, offering a diverse array of shopping options, entertainment venues, and dining establishments. Increasing visitor preference to shop from shopping centres has drastically increased. For instance, the average conversion rate for shopping centre visitors globally ranges between 20% and 40% (as of 2022). Moreover, the increase in the area of shopping malls across MEA countries, reflects the growing demand for retail and entertainment experiences, attracting both locals and tourists to the region’s vibrant shopping culture.

Director – Global Accounts & Strategic Advisory Global Market Estimates Research & Consultants

Market Size and Segmentation:

The Middle East shopping centre market is estimated to grow from USD 376.0 Billion in 2023 to USD 586.5 Billion in 2028 at a CAGR of 6.2% from 2023 to 2028.

Evolving consumer preferences, urbanization, and the proliferation of shopping malls to drive market growth.

Factors Driving Market Growth:

The expanding number of middle-class families and rising disposable incomes are boosting consumer spending, and therefore fueling the demand for shopping centres across the region. Integrated technology, personalized interactions, contactless payments, and innovative marketing enhance engagement and convenience, and increasing demand for unique in-person experiences to differentiate from e-commerce, fostering innovation in brick-and-mortar retail are some of the other driving forces of the market.

Growth Projection:

The shopping centre market is poised for steady growth in the foreseeable future, and is driven by factors like urbanization, high consumer expectations, and the preference for immersive retail experiences. Integration of technology and the presence of connected devices within shopping centres will fuel further expansion. Emerging economies such as UAE, present promising growth opportunities due to urbanisation and a burgeoning middle class.

Regional Analysis:

The Middle East region boasts a diverse range of shopping centres, from luxury malls to traditional souks, catering to the preferences and demands of both local residents and international visitors. Major cities such as Dubai, Abu Dhabi, Al Ain, Sharjah, Ras Al Khaimah, and Ajman are attracting renowned international brands and hosting large-scale events that further boost the retail sector. Technology integration in Middle Eastern shopping centres, including mobile apps and personalized experiences, have enhanced convenience and customer engagement. Furthermore, the growing number of malls are expected to drive the market’s growth. This will further expand retail space, attract consumers, and foster a thriving ecosystem of retail, dining, and entertainment all at one place.

Market Opportunities:

The market presents numerous opportunities for retailers, investors, and developers. One such opportunity lies in incorporating sustainability and environmental consciousness into shopping centre design and operations. Implementing energy-efficient systems, promoting ecofriendly practises, and offering sustainable products will attract environmentally conscious consumers and contribute to long-term success.

Challenges and Risks:

The growth of e-commerce, shifting customer preferences, unpredictable economic conditions, and possible hazards related to leasing, tenant occupancy, and market saturation are a few of the challenges affecting the market.

Investment and Expansion Trends:

Investment in the market is expected to be increasing during the 2023 to 2028, with developers and investors seeking strategic opportunities. For instance, the GCC invested USD 4 billion in Dubai, USD 3.7 billion in Saudi Arabia, and USD 166 million in Oman in 2017 to create new concept malls. The focus on mixed-use complexes, where shopping malls are joined with homes, offices, and entertainment venues to create thriving urban attractions, is one of the key drivers of growing investment cases.

Conclusion:

The market continues to be a dynamic and integral part of the retail industry. By understanding its market size, segmentation, growth drivers, regional dynamics, opportunities, challenges, and investment trends, stakeholders can position themselves for success. Adapting to changing consumer preferences, leveraging technology, and embracing sustainability will be crucial for shopping centres to thrive in an evolving retail landscape.