Dubai's ambition to become a fashion capital has been given a boost with plans for a new development in the heart of the city.
The Dubai Design District, announced by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, is intended to develop the city's fashion, design and luxury sectors.
The development is to be situated next to the Business Bay area and is to be operated by Tecom Investments, part of Dubai Holding.
The district is to be a full service commercial hub for design industry-related organisations, brands and supporting enterprises within the value chain.
"It will feature a custom-built creative community that will encompass purpose-built commercial and retail facilities for established and emerging designers, design institutes, waterfront promenade, convention centre and event venues and related academic institutions," said a statement from the government's media office.
The location was chosen for its proximity to The Dubai Mall, the world's largest shopping centre, which attracted 65 million visitors last year and two international airports.
"This is part of a long-term strategic plan laid out [to] significantly increase the population base and to do that you need to increase the residential and retail infrastructure," said Richard Adams, a director and senior consultant at Acuity Middle East.
Visitors to Dubai are expected to double to 20 million by 2020, while the retail sector is expected to grow to Dh151 billion within the next two years, according to Business Monitor International.
The development is also in line with the emirate's Tourism Vision 2020 and its bid to host Expo 2020.
The Government is hoping that the district will encourage more nationals and expatriates to enrol in fashion, design and creative skills courses in the country, while providing a base for local designers who have achieved international fame.
"The talents of the UAE's home-grown designers, from those who have already made their mark on the international stage to the stars of tomorrow, will be the vital spark driving this community," said the statement.
"These strengths coupled with Dubai's strategic location and business-friendly environment, have encouraged major industry players like Prada, Louis Vuitton, and Ralph Lauren to set up operations in Dubai."
The Middle East luxury market had growth of 10 to 15 per cent from 2011 to 2012, establishing the region as the 10th largest luxury goods market globally.
"Government has a long term strategic plan to significantly increase the Dubai population base.
"Ongoing investment in retail and residential infrastructures is, at least in part, the result," said Richard Adams, director and senior consultant at Acuity Middle East.
"The luxury offering here is very well developed and competition in the luxury space is heating up with neighbours like Abu Dhabi rolling out significant new luxury-oriented leasable area. Nevertheless, margins for most luxury brands are good; the economics behind luxury stacks up with an affluent consumer base and growing numbers of tourists whose spend per capita continues to rise," said Mr Adams.
The total stock of mall-based retail space in Dubai at the end of the first quarter this year remained unchanged at 2.8 million square metres. But this is likely to increase by the end of this year with the completion of seven major retail projects under construction throughout Dubai.
These include the JBR The Beach development, Al Barsha Outlet Village and the second phase of both The Dubai Mall and Dragon Mart, with the latter including a 1,000-seater food court.