Over the past 18 months our mall-ology series has visited some of the country's poshest shopping palaces. This time we check in on a mall that serves a different segment of the market. This would be the Dubai Outlet Mall, which has plans to grow.
A customer speaks
“I find that I keep returning because the stock varies so much. I don’t always find something to buy but often I find something and it is always a bargain,” says Grace Andrada, a sales clerk, who visits the mall at least once a week.
What are the selling points?
When it opened in 2007, the Dubai Outlet Mall was the first outlet, or discount mall in the Middle East. It follows the global model with a minimum of 30 per cent discounts on all items. In the UK and US the outlet malls are usually situated on the outskirts of town where the rents are more manageable, and this mall correspondingly sits on the Dubai-Al Ain highway.
While at first it had problems attracting retailers to the space because the “outlet” model was new to many retailers, it now has 98 per cent occupancy and is a thriving shopping space. It has a gross leasable area of 750,000 square feet, over two floors, housing more than 250 outlets. The majority of the outlets are fashion and apparel, but there are also perfumes and sporting goods. The mall does not offer the traditional concepts available in many of its peers such as supermarkets and cinemas, instead regarding itself as a destination mall. It does have a fast-food court and many cafes and a Chuck E. Cheese’s which caters to the kids while you shop.
Tracking footfall
I visited the mall on a weekday afternoon, when many of the shop staff were seriously underemployed and on a weekend when they earned their corn – the mall was teeming with custom.
The Dubai Outlet Mall has had to educate both retailers and customers about its concept but has posted double-digit sales growth year-on-year. It attracts 12,000 to 15,000 people daily with 25,000 to 30,000 visiting on the weekends, bringing a weekly total of around 165,000. The mall is as clean as any in the UAE, but possibly lacks the refinement that many premium destinations offer. It does not feel like a discount mall, but you understand that value is at its heart. The central lobby is covered with a canvas roof that, while it allows for natural light, is now showing its age, giving the light in the cavernous entrance an unnatural yellowish hue.
The outlook
The Dubai Outlet Mall has plans to expand in size and when completed it will be well over 1.3 million sq ft. Work on Phase 2 of the mall is to start “in a matter of months”, said Vishal Mahajan, its director. The mall will have a hypermarket and cinema to cater to the neighbourhood that is now growing around it. “When we began trading we were on the outskirts of Dubai, we were in the middle of the desert, but Dubai has now grown to us,” Mr Mahajan said. “Al Ahli Holding that owns and operates the mall wants organic growth which is why we have delayed the expansion until the neighbourhood demands it. We will be an outlet lifestyle concept that encourages those close to us to visit for the necessities and those that visit for bargains as a destination.”
Mr Mahajan said that the current softening in the economic climate had provided a bonus for his mall, with more and more people looking for bargains and value. The recent opening of another outlet mall, owned and operated by Meraas, suggests the concept has gained traction in the country. “There is a lot more activity with developments popping up on the Al Ain Road so an extension that includes a hypermarket and a cinema makes sense,” said Matt Green, head of research and consulting at CBRE. “The mall may not be overrun but it is consistently visited. It is very busy at weekends and parking can be a problem so they will have to look at that. The fact that another outlet mall – the Outlet Village – has opened at the opposite end of Dubai shows there is a desire and a business case for dense value developments. The new expansion will not be an expensive build so the business case looks sound.”
Any hidden gems
Some high-end shops and brands do not want to be seen in discount stores and will hide under a pseudonym. If you enjoy Alexander McQueen, Thomas Pink and a raft of other high-end designers, head to Priceless, which is owned by Harvey Nichols operator Al Tayer. It has serious discounts on big designers for both men and women.
In conclusion
One can become spoilt with the retail spaces we are offered in the UAE and when faced with something a tier below what has become “normal” it can struggle. The Outlet Mall has overcome many of those reservations and built itself a coterie of hard-core customers that enjoy the value it offers. When the new extension arrives it will lift a mall that needs some refreshment and will add another revenue stream to a consistent performer.
ascott@thenational.ae
Follow The National's Business section on Twitter