Dubai in the United Arab Emirates has long been recognised as the commercial catalyst for regional economic development and here we have already seen two of the many promised new-era retail and entertainment centres launched and trading. Ibn Battuta, the first of the new-era projects to be realised, celebrated its first anniversary in April having brought over 30 new retail concepts to the city. The Mall of the Emirates, situated in the heart of the area now coined 'the new Dubai', opens in November 2006 and will earn a place in the world's largest shopping Malls league (seventh largest Retail Mall outside of China) with a GLA of 2.4 million sqft, and this is just a glimpse of things to come.

The regional interest in retail real estate development has permeated each one of the six member states of the Gulf Cooperative Council (GCC). At a recent conference for Retail professionals held at the Sharjah Expo Centre, UAE industry professionals gathered to debate the opportunities and challenges in the face of the region's exponential growth. Simon Thomson, Principal of Retail International, revealed that in addition to the existing 50 million square metres of retail space completed in the GCC there is another 4.2 million square metres under development. This means that by 2010 we will be looking at somewhere in the region of 13.5 million square metres GLA in the GCC alone. Kuwait has two key mall developments scheduled for opening between 2007 and 2009, including the Mall of Kuwait at 131,000m2 and 360 at 59,000m2, and Qatar, Bahrain, Jeddah and Riyadh all have committed projects currently under development. Thomson forecasts that Dubai will remain the regional retail and leisure leader, holding 30 per cent of the region's total GLA within five years. The dedicated mall environment is not the only catalyst in the region's retail revolution. The now well-recognised changes in 'freehold' property law have turned the UAE into an international property investment hub and several GCC members have followed suit. Indeed, investment commitments to regional real estate developments have topped the US$300 million mark and new projects to be announced shortly are expected to add another US$100 million to this figure. The Retail City Conference to be held in Dubai in June will examine the planning techniques required to manage this retail revolution.

Retail City International Exhibition Director Franck Dailles comments: "The growth in retail development alone is colossal, but it is clearly supported by the growth of mixed use developments. Retail facilities will breathe an enhanced quality of life into these communities producing a win-win situation for the retailers, the investors, and the residents."

So how do we achieve the retail sales required to support and sustain this growth? On an indigenous level, the GCC baby boom era is now beginning to show results. With half the population under 20 and continuing average annual population growth of 3.5 per cent per annum, the UAE reports growth in 2004/5 of 8.5 per cent as it continues to attract executive expatriate residents from around the world. The expatriate population in Dubai represents 80 per cent of the total workforce of which 30 per cent is from Europe and the USA, and these numbers continue to swell. In recent years, we have seen the emergence of new and significant resident communities, in particular from Australasia and South Africa. The UAE government is committed to growing the City of Dubai to a resident population of 10 million by 2015.

The Leisure and Entertainment offer here is also geared to make its mark as a major contributor to the region's economic success. A recent report by PWC suggests that this sector will generate US$14.2 billion in revenues by 2009. In addition, we are all waiting with baited breath for the Arabian Travel Market which will no doubt see the launch of even more tourism based projects adding to existing estimate of an additional 120 hotels in the UAE by 2010, and to the already massive numbers of intra-regional and international inbound visitors.

There are estimated to be close to 500 international brands operating in the Middle East. The customer base drawn from a broad cultural and social catchment is well travelled and demands superiority at every level. If you are considering a Middle Eastern entry, you must take a detailed look at your product proposition and brand power against an international competitive set.

With so much of the retail landscape shifting and so many developments ahead, you must also carefully consider the most relevant locations for your concept and business formula. That is not only considering the market opportunities which exist today, but also building a strategy geared to sustaining a leadership position in the years ahead. Whatever your sector, awarding Master Franchises or Area Development agreements in this region will undoubtedly add a new exciting and lucrative market to your international expansion strategy. That said, it is critical for franchisors to ensure that geographic targets are well timed and specific targeted locations are carefully formulated. All of this will have an intrinsic impact on the profiling and selection of your ideal franchisee.

Tracey Furey is Managing Director of Franchise Development Services Dubai and a specialist in franchise based strategic marketing, brand building and business development activities. She has participated in a number of forums and contributed to the region's foremost business publications. She is a member of the Middle East Council of Shopping Centres and the International Business Women's Group. FDS Dubai provides services to inbound franchises including market research and market entry planning, franchisee profiling and recruitment, and pre-opening project management.
Email: tracey@fds-dubai.com
Call + 971 4 211 5442