Shoppers are expected to come in droves to see the latest monument to commerce, but it remains unclear whether they will spend. And whatever business Mirdif attracts is likely to mean a corresponding loss at existing malls, analysts say.
Peter Walichnowski, the chief executive of Majid Al Futtaim Properties, said that although the timing of the opening of Mirdif City Centre was not ideal, he expected strong demand for retail space in the Dh3 billion (US$817 million) mall. "We opened this mall because strategically it makes sense to have a mall in this location, on the Emirates Road, in the north-east growth corridor," he said. "With 450,000 people in 10km drive, and also near the Northern Emirates, which don't have a regional mall. So however the economy is at the time, it still makes sense."
The mall, with 350 of its 430 shops ready for business yesterday, is the third centre to open in the Mirdif area of Dubai after the smaller malls Arabian Centre and Uptown Mirdif. Mirdif City Centre also enters the market after a tough year for retailers as shoppers became more frugal and the flow of tourists to the Emirates slowed. And with the opening of several malls in the past 18 months, such as the 1.12 million sq metre Dubai Mall and Oasis Centre, the available spending is being stretched thin.
Retailers have started relocating to better-performing malls, and some centres with vacancies have lowered their rents, analysts say. By the end of this year, the total mall retail space across Dubai will reach an estimated 2.5 million sq metres, according to the property consultancy Jones Lang LaSalle. This is expected to reach 2.9 million sq metres by 2012, although some projects have been postponed.
Mark Morris Jones, the director of retail in the MENA region for CB Richard Ellis, expects Mirdif City Centre to put pressure on other malls, especially those in the immediate area. "If you open a new mall and offer another 400 shops with thousands more square feet in the market, if there is no commensurate increase in the spend, then obviously you are cannibalising your existing market," he said. "And existing locations will suffer the consequence."
Dave Macadam, the regional director of retail at Jones Lang LaSalle, said he expected Mirdif City Centre to have a slow start but ultimately to fare well, given Majid Al Futtaim's record with its projects, including Mall of the Emirates. But other malls and retailers in the emirate will have to work much harder to stay afloat, he said. "Malls here have had it pretty easy over the last three or four years," he said. "But my guess - is that the retailers and the mall owners are going to have to get a lot better at what they do to retain and attract new shoppers."
Residents in the surrounding area welcomed the new mall. Meriel O'Connor, 30, a housewife from Ireland who lives opposite Mirdif City Centre, said: "We've been watching them finish the mall, and it's great for us and for everybody living around here." * additional reporting by Eugene Harnan firstname.lastname@example.org