Tired of luxury, Dubai’s shoppers opt for smaller malls

For many of Dubai’s residents, visiting the glitzy Mideast trade hub’s biggest shopping malls, famous for their cavernous size, snow-packed indoor ski slopes, and giant musical fountain displays, can be a headache.

Faced with the prospect of a lengthy drive, followed by an inevitable hunt for scarce parking spaces and loud, madding crowds, some opt for less frenetic options down their street. And retailers and mall developers are catching on.

“Here, it’s cozy, and smaller,” said Malak, who sips coffee with a friend in a mall coffee shop while keeping an eye on her two young children.

Several times a week, the Lebanese housewife takes a ten-minute journey to City Center Me’aisem, a mini-mall in a dusty residential area. Due to a quirk in Dubai’s road network, she can get back home in half the time.

Her comments are echoed by Emad, who sits outdoors at another of the mall’s coffee shops, smoking a cigarette after his mid-day espresso. “This mall is good for the community, as it’s so close by,” he said. Before, the Jordanian operations manager had to indulge his workweek habit in Media City, an office park 15 minutes away.

City Center Me’aisem, referred to by the city’s developers as a “community mall,” opened last September, and is owned and managed by the Majid al-Futtaim group. The Dubai-based holding firm, which reported revenues of $7.4 billion in 2015, owns 13 malls in the UAE, and six in the wider region.

The group’s best-known holding is Mall of the Emirates, situated just off the city’s main thoroughfare, the skyscraper-lined Sheikh Zayed Road. There, shoppers can ski down a 400-meter-long piste, go to a multi-screen cinema, dine in dozens of restaurants and shop in luxury stores.

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A few kilometers away, at the base of the world’s tallest building, the Burj Khalifa, lies its arch-rival, Dubai Mall, the largest mall in the world by total area. Both buildings were constructed by local giant Emaar.

Downsizing

However, since the great recession of 2008, both firms – as well as Nakheel, the builder of the man-made Palm island - have tweaked their strategy, choosing to build far smaller community malls coupled with extensions on their flagship properties.

By the end of the decade, as many of 20 mini shopping centers expected to have been completed. As well as their smaller size, community malls usually offer a large supermarket as the main tenant, surrounded by restaurants, cafes and mid-range shops.

But while community malls have their benefits, their scaled-down format means they have a limited scope for growth, retail executives say.

For luxury shoppers - composed of both wealthy residents and the millions of tourists – the mini-malls have little to offer.

“When you talk to the luxury industry and the brands within that industry. They’re not looking at smaller centers,” Shahram Shamsaee, a partner at local retail developer Msquared Shopping Centers, said on the sidelines of Arab Luxury World on Thursday. Arab Luxury World is an industry conference held every year in Dubai.

Luxury brands require a mall with dozens of restaurants, mass-market brands, and world-class entertainment facilities to get the key volume of footfall needed, he said.

“In a small center, it’s very difficult to put all of that together.”

For luxury shoppers - composed of both wealthy residents and the millions of tourists - the mini-malls have little to offer.

Meanwhile, changing consumer tastes and a slowly maturing market are changing the format of shopping malls in Dubai.

“As Dubai as a city matures… you’ll see a huge shift in the way that consumers want to spend their money,” Michelle Saywood, the vice-president of design at Meraas Holding, said at a panel discussion at Arab Luxury World.

In February, Meraas opened City Walk, a mall which offers shoppers the chance to walk outdoors, in contrast to most of Dubai’s sealed, air-conditioned centers.

Despite sweltering summer temperatures, Saywood sees a future in smaller, partially outdoor shopping formats – which offer “a sense of being in an environment that is not a hermetically sealed box.”