Will Dubai’s Retail Market Show Increases In Disposable Income?

Many experts may think that the current retail market in Dubai will show a decline due to declining disposable incomes. The financial projections show growth in disposable incomes for years 20121 to 2023. The projections are showing that an increase by .1% to 0.6% for the years 202`1 to 2023. This increase will happen due to upcoming due to other areas that include smaller community centres and convenience retail that include non mall outlets. The convenience and proximity of residential areas will allow an upward swing of spending in the retail market.

Many regions in the area are placing new malls and shopping areas that exert pressure on on the performance metrics. Regional Malls and Super Regional Malls are in the pipeline such as Meydan One, Al Khail Avenue, Cityland Mall, Deira Mall and Dubai Hills will be adding another area of convenience that includes 1.1 million sq m of space for retail shoppers. Although the Dubai Mall and Mall of Emirates continue to be the popular of 51% of the market share, 49% of the market will be captured by other community malls for shoppers.

Since 2016 the majority of shoppers in the Dubai area have been South Asian tourists that capture 25% of the market. This figure has doubled since 2016, and is expected to increase in the area due to Expo 2020. The recovery of retail sales will continue to grow after a dip in the market at the end of 2020. Although retailers see a decline currently in the market, the increase will increase starting in the year 2021.

As consumers feel safer on spending in the next 3 months, spending will increase in the Dubai retail spaces. Many communities are shifting to add spaces for more convenience to the shopper. This will allow retail businesses and investors to get in areas that were never available before. The supply and demand factor will be different where communities are developing. Convenience is in the mind of shoppers with disposable income. Residential areas that have communities taking both commercial and mix of residential will see an increase in revenue due to growth in smaller communities.

Source:EIUa : actual, e: EIU estimate, f: EIU forecast

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