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 MEDIA REPORTS
Welcome to the Retail International® media Reports.
BEYOND THE GULF TO THE BOSPHORUS
- A SPECIAL REPORT BY SIMON THOMSON With retail footage in the six GCC states on course to top 11 million sq. metres by 2010 it is no great surprise that Gulf based retailers and mall developers are looking enviously at the undershopped masses in nearby countries for future growth. According to the latest Retail International® survey of the region’s shopping centres, published to coincide with the ICSC Retail Real Estate World Summit in Istanbul from 20-22 April 2005, the UK based consultancy expects the GCC market to have reached more than 120 million square feet (Approx. 11.5 million sq. metres) of space by the turn of the first decade of the 21st century. This figure may appear dramatic, but set against an existing stock of some 4.5 million sq. metres with a further 2.8 million sq. metres under construction the end total made up of 4.0 million sq. metres in the pipeline as either probable or possible the forecast falls into perspective. "Even with the pace of economic and population growth currently being experienced throughout the Gulf, some plateauing out of the market would seem inevitable" says Simon Thomson, Principal of Retail International® "thus the potentially lucrative markets of the larger neighbouring countries as well as those of North Africa are bound to feature in the growth plans of developers and retailers in the coming years". Dubai has set out its stall for some time as the centre of a billion population market stretching from the Caucasus to the Indian subcontinent. While many will travel from these countries to Dubai, the traffic is by no means one way. Developers such as MAF Investments, Emaar, etc and retailers such as Al Shaya Group are already blazing a trail into Egypt, Jordan, Lebanon, Syria, Iran and Turkey. Where these lead others will surely follow. It can only be a matter of time before names familiar in the Gulf will be not only in these markets, but Libya, Morocco, Algeria, Tunisia and of course Iraq. Kuwait too already witnessing some major schemes and an entry point to the Iraq market can expect considerable further growth once stability takes hold in its dominant neighbour. Jordan another entry point to Iraq is also going through something of a transformation in the retail markets with significant projects coming up. The evolution of free trade agreements with the United States by countries such as Bahrain, Jordan, Qatar and UAE will also further transform local market conditions leading to greater transparency and increased trade. Relaxation of restriction on foreign ownership coupled with tariff free markets may do much to persuade US retailers away from their reluctance to date of considering the Middle East as a serious trade market and not just as the stereotypical on-going war zone beloved of cable news networks. IRAN With a population of 69 million and substantial reserves of oil and natural gas Iran is well placed to provide a long term market for Gulf based retailers and developers. Already MAF investments have announced its intention to enter Iran and fashion retailers Giordano Middle East already has a growing presence with seven stores opened in 2003 and a further eight during 2004. Iran is no stranger to western retail influences with numerous brands and merchandise available in shopping centres and outlets in Kish Island, the offshore free zone island popular with wealthy Iranians. JORDAN Jordan’s population of 5.6 million supplemented by 2 million tourists in 2004 has benefited from the fallout of the Iraq conflict with a growth in GDP expected to increase to 5.2% in 2005 from 2.8% in 2003. Hard evidence of this growth is provided the entry into Jordan of some of the region’s key players. These include Al Shaya group with brands such as Starbucks, Claires, and Body Shop and the remainder of its stable of 15 or more brands expected to follow shortly. Broadway Trading from the UAE franchisees of the highly sought brands of Spanish group Inditex, such as Zara, Massimo Duti and Pull & Bear are also planning to enter the market. The Landmark Group another highly successful Gulf retailer will also begin operations this year. The hypermarket presence too will also be substantially enhanced. Spinneys Jordan following its acquisition last year by Dubai based HBG Holdings has turned around the business with a significant cash injection that is forecasting sales of over $40million in the current year rising to over $70 million annually in the next three/four years. This coincides with Kuwait based Sultan Supermarkets acquiring Safeway and news that Carrefour will be moving in to the country to anchor the new City Mall in the nation’s capital, Amman. City Mall will be the largest shopping centre in Jordan with a total area of 160,000 sq. metres. Other upcoming projects in Jordan include the massive redevelopment of the Al-Abdali district in the heart of Amman. Still in the master planning stage it is seen as creating a new mixed use downtown for Amman in a new urban community combining education, business and culture including a major commercial/shopping centre. At Aqaba the country’s port on the Red Sea plans are also in hand for significant resort and leisure development all of which will incorporate significant retail elements. PALESTINE Despite outsiders perception of a nation in constant turmoil business continues to flourish in this country with no better example than the opening of The Plaza Shopping Centre in 2003 at Al-Bireh, Ramallah, West Bank. Although not in the Dubai league in terms of area. the significance of the project far outweighs its size of 21,500 sq. ft. (approx. 2,000 sq. metres). Developed by Arab Palestinian Shopping Centres at over $10 million the centre opened its doors in July 2003. More recently Dubai based Emaar Properties were reported to be looking at opportunities in the country. Others no doubt are also maintaining a watching brief on the future opportunities that may well emerge as the political situation stabilises. SYRIA With a population of 18 million Syria has the potential for becoming a significant retail opportunity. This fact has not been lost on the likes of regional retailers such as MAF Investments of UAE and Jawad Business Group of Bahrain. MAF investments are planning to develop an integrated tourist complex near the Syrian-Lebanese border. It remains to be seen whether Carrefour will feature in these plans. LEBANON Recent events following the bombing in Beirut and the assassination of former Prime Minister Rafiq Hariri raised inevitable concerns that the country would once again dissolve into civil war. So far such fears appear groundless. This is comforting news for the retailers and developers involved in the newly completed and up coming shopping centres in Beirut. The first mall of any significance ABC Shopping Centre was completed in 2003 and with some 42,000 sq. meters and anchored by ABC’s own flagship department store (10,000sq metres) the mall offered critical retail mass to an extent not previously available in Beirut. This has now been followed by the first regional style mall in Beirut, City Mall. Located on the northern highway at Dora this centre developed by Admic provides a built surface area of 175,000sq. meters and is anchored by an 11,000 sq. meters Géant hypermarket, the second such store in the region by the French group Casino. Once again under construction following a delay of several years is Solidere’s The Souks of Beirut. Comprising 100,000 sq. metres in the heart of downtown Beirut this long awaited project should now be completed 2006/2007. Elsewhere in the city Dubai based Al Habtoor Group are pressing on with the development of Metropolitan City Centre at Sin El Fil. This is expected to include three anchor stores and over sixty speciality units plus two family entertainment centres and a number of food outlets. MAF Investments from Dubai will be introducing the first Carrefour to Lebanon to anchor its upcoming mall at Dbayeh. Although many international brands are already well represented by local licensees and franchisees the major operators from the Gulf such as Al Shaya Group may well be keen to share in the opportunities that a reborn Lebanon can certainly offer. EGYPT Despite having the largest population in the region at 76 million and more than 6 million tourists, Egypt has a long way to go to catch up the Gulf in retail terms. Overburdened by bureaucracy, lack of freedom on imported merchandise and repatriation of profits continue to hold back the development of the retail sector that it so richly deserves. Notwithstanding, a few determined retailers have been pressing ahead with entry into this difficult market. Notably Spinneys the UAE owned supermarket group has decided to open its first Egyptian outlet at City Stars Cairo, the 800,000 sq. metre retail and commercial complex that opened in 2004. MAF Investments in conjunction with local partners Misr has opened two Carrefour hypermarkets in Egypt at Maadi City Centre, Cairo (22,000 sq. metres) and Alexandria City Centre, Alexandria (32,000 sq. metres). A third project is planned. Due to be fully operational this year is Dandy Mega Mall with some 70,000 sq. metres, comprising a hypermarket (14,000 sq. meters) and stores for Monoprix and BHV. Elsewhere Metro the German cash n’carry and grocery chain is expanding its activities from Cairo and Alexandria to outlets in Port Said, Suez and Ismailiya. TURKEY By contrast to Egypt yet with a similar size population, Turkey in retail terms is powering ahead. The Turkish retail market, with an increasing young population, constant efforts made to modernize the economy and with the European Union’s positive effect, has a remarkable potential. Mall development started over ten year ago and the number is growing with high quality centres in Istanbul and Ankara. Almerkez although opened in 1993 is still reckoned by many to be one of the best and confirmation of this in winning several International Council of Shopping Center’s Prizes. Al Shaya Group from Kuwait is the leading Gulf retail investor in the country with upwards of thirty outlets in the country and more in the pipeline. Major supermarket players include Metro of Germany, Carrefour of France and Tesco from UK. Analysts report that the size of the Turkish retail market is some 1.7 million sq. m. Total Leaseable Area with 800,000 sq. metres in Istanbul. There are reckoned to be over 80 shopping centres across the country of which 34 are Istanbul, 12 in Ankara and 6 in Izmir. And it is in Istanbul where it all began. ISTANBUL Famously where east meets west Istanbul of course ‘invented’ the shopping centre centuries ago. Think of shopping in Istanbul and it is probably the Grand Bazaar that first springs to mind. The Grand Bazaar first saw its beginnings as 2 wooden bedestans, or warehouses with individual cells for stalls, named the Cevahir Bedesten and Sandal Bedesten, erected during Mehmet the Conqueror's reign towards the end of the fifteenth century. The chance of being destroyed by fire necessitated that they be rebuilt in stone and they have since been absorbed into the core of the Bazaar today. It covers an entire area of 30 hectares and has almost 4,400 shops, 40 hans (a type of night stop-over where dealers could unload their wares) and encompasses over 60 streets. Shopping centres have become a part of daily life in Istanbul, and there are now several in different parts of the city. They fit in well with the rapid pace of life today, saving precious time by offering a wider diversity under a single roof. Modern shopping centres include, Galleria was Istanbul’s - and indeed Turkey’s - first modern shopping mall. Situated in the western suburb of Ataköy, it was opened in 1988. For several years Galleria was without competitors. Akmerkez in Etiler, Carousel in Bakirköy, and on the Asian bank of the city, Capitol and Carrefour opened in rapid succession. As well as locally made goods these centres contained shops selling world famous brand names. Galleria reflected the changing face of Turkey in the late 1980s, with scores of shops selling a wide range of goods which included a high percentage of imports, cafés and restaurants that made going there a popular day out. At weekends in particular people flocked there from all over the city. With its 140 shops Galleria attracts an average weekly total of 300,000 people, while on weeks when there are public holidays this number can be as high as 500,000. In 1995 Akmerkez was declared to be Europe’s Best Shopping Centre by the International Council of Shopping Centres, and in 1998 was selected as the World’s Best Shopping Centre by the same organisation and received the International Design and Development Award. Akmerkez opened in 1993 and is visited by between two and two-and-a half million people every month. At weekends and before public holidays and New Year the number of visitors soars to around 100,000 people daily. Akmerkez shopping centre has 240 shops and a total floor area of 180,000 square metres on four floors. Above these rise two blocks of office premises of 14 and 17 storeys respectively, and a 24 storey residential block. The highest proportion of customers come from the surrounding districts of Etiler, Levent and Ulus, which are in walking distance, and from the European shore of the Bosphorus. They generally visit the centre during the week and do most of their household shopping here. The second group of customers come from districts slightly further away, such as Niþantaþý. But at weekends people from all over the city are to be found here. Capitol shopping centre also opened in 1993, and is now visited by 12 million people a year. It has 120 shops, 8 cinemas, cafés and open and closed car parks. This is a spacious shopping centre around a huge central well through which daylight pours. On special occasions the number of visitors rises to 80,000 a day, mainly from the east bank districts of the city. Carousel, which opened in 1995, pulls in approximately 50,000 people per day, and 18 million people a year.
In holding its World Summit in the city the ICSC has really come 'home'.
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