Sales are expected to grow by 13%, supported by pent-up consumer demand, Covid-19 vaccination efforts and Expo 2020 Dubai
UAE retail sales are expected to reach $58 billion by the end of 2021, new analysis from Dubai Chamber of Commerce and Industry has projected.
Sales are expected to grow by 13 percent, supported by pent-up consumer demand, Covid-19 vaccination efforts and Expo 2020 Dubai.
Global spending plummeted as coronavirus lockdowns shuttered shops – temporarily and permanently – and consumers were forced to remain in their homes and the global economy faced a sharp downturn.
UAE retail sales are forecast to maintain 6.6 percent annual growth in the medium term to reach $70.5 billion by 2025, according to the new analysis.
“Progress related to the UAE’s vaccination campaigns is expected to boost demand in the second half of this year and attract consumers and tourists back to traditional stores. Expo 2020 Dubai, scheduled to kick off in Dubai this October, is expected to be a major catalyst for the recovery of the retail sector, in addition to the support and incentives provided by governments to business sectors at the federal and local levels,” a statement announcing the findings said.
The UAE currently leads the Middle East and North Africa region in terms of household spending on e-commerce at $2,554 per household, which is twice the value of the global average of $1,156, and four times the value of the average in the MENA region ($629).
“As new retail space in the UAE continues to come online in the short term, the market has become more favorable to tenants, due to expected lower rents and more available options, a trend which should support the recovery of retail businesses,” the press release said.
The retail market in Dubai has turned tenant-friendly in the wake of coronavirus, and landlords’ demands to pay a year’s rent in a single check have diminished.
JLL MENA real estate advisors found that Dubai saw 110,000 square metres (sqm) of retail gross leasable area (GLA) completed in 2020, which brings the emirate’s total retail stock to 4.2 million sqm. This year, Dubai retail gross leasable area is expected to expand by 761,000 sqm.
While Abu Dhabi’s growth was stagnant last year, 293,000 sqm of new retail gross leasable area is expected to be added to the UAE capital by the end of the year.
“The analysis added that the Covid-led digital shift has created new growth opportunities for regional expansion for traditional retail and e-commerce companies based in the UAE, especially in markets with large populations, such as Saudi Arabia, Egypt, Algeria and Morocco,” the press release said.
Source: Arabian Business