Qatar is increasingly becoming an attractive place for retailers
Qatar is increasingly becoming an attractive place for retailers, but is there sufficient demand to support such an expansion in the market?
It seems that barely a week goes by without the announcement of a new retail complex or super-mall in Doha. It is no secret that the powers-that-be in Qatar want to make the country a more attractive place to live and work in, with a wide array of leisure and shopping activities for residents an important part of the plan.
And it seems that international retailers are taking notice, increasingly seeing the Qatar market as an attractive one, with significant potential to grow over the next decade and beyond.
In fact, a report in December from EC Harris that looks at the world’s most attractive retail markets found that Qatar is leading the way in the Middle East, having moved from eleventh in the 2012 report to seventh most appealing market for retailers this year.
EC Harris said that due to a reputation for efficient project delivery and ease of transition, Middle Eastern markets are proving increasingly attractive to international retailers.
The report added that the trend is set to continue, with the Middle East becoming a strong contender to the Western markets which currently remain the most desirable according to the index, with the UK, Germany and the Netherlands topping the list.
“Retailers are increasingly seeing the benefits of expanding their businesses into Middle Eastern markets with its strong consumer base, high levels of wealth and established construction market,” said Terry Tommason, head of property, Middle East at EC Harris.
“Qatar is proving particularly attractive with a number of new shopping centre developments being built to cope with demand in the Middle East region. The country currently provides approximately 300 square metres of organised retail accommodation per 1,000 people while most European countries have an average of 200 square metres.”
On the face of it, the report may well have raised a few eyebrows as evidence – anecdotal though it may be – suggests that there is not the demand to support the malls that are already in place, with the vast halls in Central Doha and the West Bay hardly full to bursting.
However, there is every confidence that as the country grows, demand will ramp up. “Qatar is currently experiencing explosive growth with a population of two million and the highest GDP per capita in the world, which is expected to continue grow as expatriates move to Qatar prior to the World Cup 2022,” comments Donald Weir, general manager of the Mall of Qatar, which is currently under construction.
“We believe this will provide all developers with a great opportunity to bring something new and unique to the market, and customers with a variety of retail choices that will meet a host of different consumer needs and requirements.”
Gary Moore, the regional general manager for Applebee’s in Europe and MENA – which has a number of franchise outlets in Doha – agrees with the sentiment, but adds the caveat that competition could see some developments fall by the wayside: “It is clear that the economy is growing rapidly in Doha and across the region.
As we know, good quality organised retail is a key driver of economic growth so it makes sense for mall developers to ramp up development in advance of the expected surge in population and retail spending.
“Supply and demand will always tend to meet at some point. For the next few years it is probable that supply will be chasing demand and that some retail developments may not succeed, but that’s how competition works. Timing your entry either as a developer or as a retailer is critical.”
Key to success will be attracting top brands to the country, with the luxury market playing a large role, says Weir: “We are currently in discussions with a number of retailers who will not only be present in Qatar for the first time, but also completely new to the region and we are extremely excited about the role these brands will play in changing the retail space in Qatar and across the region.
“Here, at the Mall of Qatar we see the potential in the market for luxury retail. Done well, and given the right setting and adjacencies we are positive that luxury retail will flourish and with an anticipated spike in disposable income we are confident that the luxury elements of the Mall of Qatar will do extremely well.”