The Changin Retail Landscape in Muscat Ian Gladwin

The changing retail
landscape in Muscat
Developments & opportunities
Oman Real Estate Conference – May 2014
INTRODUCTION
Ian Gladwin

Head of International for Cluttons.

Fellow of the Royal Institution of Chartered Surveyors (RICS).

Over 20 years real estate experience throughout the Gulf region.

Prior to joining Cluttons, I worked extensively in Kuwait and the Northern Gulf with a particular
focus on the retail sector.

Recently appointed as the Regional Representative for Oman for the Middle East Council of
Shopping Centres (MECSC).
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Presentation overview

Key regional retail trends.

Muscat consumer profile.

Muscat – a changing retail landscape.

Market gaps and opportunities.

Conclusions.
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KEY REGIONAL RETAIL
TRENDS
Abu Dhabi
Significant expansion

Rapidly developing retail sector

Buoyant economy with a wealthy population

Focus on the Saudi Arabian customer
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Bahrain
Saudi Arabian customer base

Mature market

Driven by Saudi Arabian consumers
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Kuwait
Sophisticated market

A developed and sophisticated retail sector

High spending power

Focus on luxury
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Qatar
High spending power

Developing market

High GDP per capita

Significant spending power of the customer base
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Dubai
Return to growth

High consumer spending power

Rapid resurgence and development

Neighbourhood retail development

Tourism driver
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MUSCAT CONSUMER
PROFILE
Consumer profile
The population

Rapidly growing.

1.2 million people in Muscat (40% Omani and 60% expatriate).

Generally a youthful population.

Expanding westwards.
Spending power and patterns

Rising but relatively limited incomes.

Average per capita monthly income of RO 175.

Average household expenditure of RO 900 per month.

One third of monthly household expenditure (RO 300) is on food.

Around RO 30 of monthly household expenditure is on dining out.
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MUSCAT – A CHANGING
RETAIL LANDSCAPE
From souqs to malls
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First generation malls
The malls
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Key features

SABCO Centre

Centrally located

Al Araimi Complex

5,000 to 15,000 m² leasable space

Al Khamis Plaza

Generally no anchor stores

Al Qurum Complex

Cultural shopping habits.

Al Harthy Complex

Food and fashion.

Zakher Mall

Social ability.

Traditional trading hours.

First generation format.

Brand mix and identity.
The new generation
The malls
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Key features

Markaz Al Bahja – 2000

20,000 m² plus leasable areas

Muscat City Centre - 2001

Anchored by a super/hypermarket

Qurum City Centre - 2008


Muscat Grand Mall - 2012
More complex design with sub-anchors
and zoning
Retail mall supply
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Existing supply
Muscat currently has approximately 350,000 m² of retail space in purpose-built retail
centres. The larger malls are:
Mall
Muscat City Centre
Qurum City Centre
Tilal Grand Mall
Markaz Al Bahja
Zakher Mall
Al Araimi Complex
Approximate leasable area (m²)
56,500
20,600
45,000
20,500
15,800
12,000
Retail mall supply
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Under construction
Two new malls in Bausher should be completed this year and will deliver an additional
80,000 m² of larger scale retail mall space:
Mall
The Avenue Mall (Lulu extension)
Panorama Mall
Approximate leasable area (m²)
60,000
21,000
Three smaller malls are also due for completion this year:
Mall
Jasmine Complex, Al Khuwair
Al Marsa Retail Centre, The Wave
Military Retail Mall, Mawalleh South
Approximate leasable area (m²)
4,000
6,000
8,000
Retail mall supply
Proposed
There is also a very significant pipeline of proposed retail mall space.
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Retail mall supply
Downtown Muscat, Mabellah South
 A development by the Al Jarwani Group projected to provide around 80,000 m² of
leasable space with extensive leisure/entertainment facilities.
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Retail mall supply
Mall of Oman, Bausher
 Development of a 157,000 m² plot by Majid Al Futtaim Group (MAF) with a RO 180
million retail mall providing around 350 retail outlets.
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Retail mall supply
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Muscat Festival City, Airport Heights
 Super regional mall anchored by Ikea located at the Oman Convention and Exhibition
Centre in Airport Heights.
Retail mall supply
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Muscat Grand Mall
 RO 50 million expansion of Muscat Grand Mall to provide an additional 100 retail units
in 30,000 m² of space and extend the existing cinema.
Retail mall supply
Proposed supply pipeline
 We would estimate that these four developments would deliver around 300,000 m²
if/when they are all built.
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Retail mall trends
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 The supply pipeline will result in an increasingly saturated and congested market.
 Focus of development on large scale malls is resulting in a supply pipeline of very
similar style retail malls.
 Addition of entertainment/leisure facilities is being used to help drive mall
performance.
 Mid to high end international brands have generally not performed strongly and an
international department store is yet to appear in Muscat.
 “Value” sector outlets perform well.
 Hypermarket anchors are the primary driver for footfalls.
MARKET GAPS &
OPPORTUNITIES
Growing economy and population
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Understanding the market
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Mall design
Design for different reasons:

Lifestyle

Aspirations

Modern living

Destination and neighbourhood

Mind set

Experience
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Tenant strategy & mix
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Tenant strategy & mix
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Neighbourhood retail
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Neighbourhood retail
Al Marsa Retail Centre at The Wave
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Neighbourhood retail
Al Marsa Retail Centre at The Wave
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Outlet retail
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Souk/leisure retail
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Big box/power centre
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g box/power centre
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ONCLUSIONS
nclusions
tives:
A rapidly developing sector with a growing consumer base
Positive economic trends
Development opportunities opening up
development issues:
Complex form of development needing real market
knowledge and understanding
Focus on the needs, desires and spending power of
he target market
nput of retail experts is vital
Tenant strategy and mix is key
Pro-active management needed
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