Second chance to buy into the retail boom



In the not too distant past, trying to invest in the retail market in the UAE was a difficult task.

Apart from a few notable exceptions such as Damas, the biggest jeweller in the region, few retailers joined the initial public offering frenzy of the boom years, making it difficult to gain exposure to the industry.

Most of the retail players were family-run shops that kept their cards, profits and expansion plans close to their chests.

In this private environment, Dubai and the wider UAE became a retail destination for the world, rivalling London, Paris and New York for the sheer number of stores and brands available to shoppers.

Now though, as major listed developers shun spending on residential and commercial property and instead welcome the safer, recurring income of a mall tenants, investors have the opportunity to buy into a second retail wave.

Emaar Properties, Nakheel and Majid Al Futtaim (MAF) are collectively investing billions of dirhams across the Middle East on mall, entertainment and leisure developments, as well as adding new brands.

Emaar, one of the Gulf's biggest developers, said recently it planned to add 92,900 square metres to its 1.1 million square metre Dubai mall.

Both Emaar and MAF, the owner of the Mall of the Emirates, reported strong profit performances in the second half of last year as income from stores in their malls grew.

Nakheel is doubling the size of Ibn Battuta Mall and DragonMart, as well as raising Dh300 million in bank loans to build a shopping, restaurant and marina complex called The Pointe, on the tip of the Palm Jumeirah.

The developer is also expected to begin work on the much anticipated Palm Mall this year, which will offer about 80,000 square metres of leasable retail space.

Driving the development of shopping space are the growing profits of retailers - a result of tourists flooding their stores and residents feeling increasingly confident to spend more.

Gaining access to this booming market, however, is still not that easy, but Emaar is listed and analysts are confident about the stock. MAF is expected to issue a bond this year, as well as a sukuk, which investors could look into, and Damas is today highly rated by analysts.

A bid from Mannai, a Qatari conglomerate, is expected to be made to all Damas shareholders next month.

But at 37 US cents, the shares trade more than 15 per cent below 45 cents, the price at which 58 per cent of investors have provisionally already agreed to sell their shares to Mannai.

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Greatest of All Time
Starring: Vijay, Sneha, Prashanth, Prabhu Deva, Mohan
Director: Venkat Prabhu
Rating: 2/5