Around $3.7 billion-worth of retail construction contracts are set to be handed out in Dubai this year, according a report.
Contracts will he awarded across four key projects, ranging from the $1 billion Dubai Creek Harbour and similarly-valued Mall of the World: Phase 1, to the US $900 million Deira Mall and US $763 million Dubai Hills Mall, according to the MEED (Middle East Economic Digest) Projects database.
By contrast, the value of similar contracts awarded last year was $502 million and $812 million in 2015.
The projected awards reflect an increase in development activity ahead of Dubai’s hosting of Expo 2020, but take place against a backdrop of weakness in some key visitor markets.
In the UK, the vote to leave the European Union has weakened the Pound, making the Dirham expensive for UK visitors. Russia continues to suffer from weak oil prices and sanctions linked to the Ukraine conflict.
“This is an ongoing trend from 2016, and all retailers and mall operators and developers need to review new target markets and how to incentivise local shoppers. This will have an impact on the feasibility of mall developments,” Matthew Dadd, partner and head of commercial at Knight Frank Middle East, told Gulf News.
In Abu Dhabi, contractors are pinning their hopes on two main projects following the apparent putting on hold of Al-Falah Mall and The District on Saadiyat Island, worth a combined US $439 million.
Reem Mall, valued at US $1 billion, is set to go ahead, with Al Futtaim Carillion having been named as the preferred main contractor. Beyond its lineup of well-known retail brands, the mall’s key attraction is the ‘world’s largest indoor snow-play park’.
Work on Al Maryah Central, valued at $409 million, is underway, with the main construction contract awarded to Brookfield Multiplex.