Malls of the UAE: Al Futtaim leads Dh1.5bn ‘rebirth’ of Festival City

Festival City had to create a reason for people to cross Dubai Creek and it has succeeded on several fronts. This is a beautiful looking space populated by brands including Eataly, Mint Velvet, Sugar Factory and (coming soon) Robinson’s. Part of our occasional series on the malls for the UAE.

Above, the new extension to Festival City Dubai. Antonie Robertson / The National
Powered by automated translation

Our mall-ology series pops into Dubai Festival City Mall and discovers that it is making an earnest effort to put itself in the mix of the country’s top shopping centres. But the times remain challenging …

A shopkeeper speaks

“The mall has improved its footfall by at least double since the extension, I would say. The locals love it because it is not as busy as Dubai Mall and the shops are now very high end.”

What are the selling points?

On Boxing Day 2016 Festival City unveiled a unique Vegas-style attraction – a multimedia, laser, fire and film extravaganza set at the mall’s greatest selling point – its location at the side of Dubai Creek.

Festival City has no built-up residential areas surrounding it that would act as a stimulus for business. It is at the northern end of Dubai as the emirate grows in a southerly direction. It has had to create attractions to bring the public across the Dubai Creek bridge, and with many other malls also offering entertaining attractions, Festival City mall has struggled.

The mall opened in 2007 and has found it a challenge to create a pull for residents and tourists. However Al Futtaim, the group that owns and runs the Festival City site, backed its initial investment last year and has ploughed a further Dh1.5 billion into remodelling and reinventing the space creating a mall that now surpasses most of its competition. It has added stores and brands that can be found nowhere else in the UAE and banked on the region’s love for eating out with 75 F&B outlets, many of them overlooking the creek.

Tracking footfall

I visited this mall twice, once on a weekday afternoon and once on a weekend evening. The afternoon visit underlined the fact that it does not have an immediate catchment area – it was sparsely trafficked and the investment into the beautiful cafes and bistros overlooking the creek seemed somewhat forsaken. Many of the F&B outlets offer breakfast and lunch deals to stimulate demand. The evening visit could not have been more different. The brightly lit avenues and restaurants which, while not full, had a buzz and life about them that infused the whole mall. The new light show on the creek drew patrons outside to watch and many tables overlooking the creek had families and customers enjoying the attraction.

The mall’s owners have actively challenged its shortcomings and invested heavily in components that interest and entertain. The mall is 91 per cent leased with some space being held to ensure the retail mix remains competitive.

The outlook

The mall’s operators claim that footfall has increased by 41 per cent since it opened the largest water screen projection in the world, “Imagine”.

“This is a rebirth because we knew there was a lot we could do better,” said Steven Cleaver, director of shopping centres at Al Futtaim Real Estate. “We are very close to the airport, we have a vibrant, lively brand mix and believe we can attract tourists to the mall now. ‘Imagine’ will be refreshed in Q2 of this year and it will evolve again shortly after that. We can host 12000 people for events and functions and have parking for 9,000 cars. Festival City has taken a huge step forward for the next five years because we have key points of difference with the competition.”

With 22 per cent of the gross leasable area now taken up with food and beverage outlets, many overlooking the creek, the mall is catering to the country’s love of eating out, however F&B has become a cut-throat sector to compete in. The UAE’s biggest department store – and a first for the country, the 200,000 square feet Robinson’s, is set to open in March offering brands never seen before in the UAE.

Many other firsts in country outlets like Sugar Factory and Mint Velvet now line the mall’s concourses and a new 18-screen Novo cinema offering the full range of VIP, gold class and standard seating will be fully open in April.

While Festival City’s transformation from duckling to swan is startling, the retail environment currently enveloping the country means it has a challenge.

“About 260,000 sq metres of retail space was completed in Dubai in 2016, the highest volume since 2010,” stated JLL’s Real Estate Overview 2016. “Q4 saw the completion of about 20,000 sq meters of retail space in the Dubai Festival City expansion. Given muted market activity and demand, the potential entry of more than 300,000 sq metres of additional retail GLA, just in Dubai, in 2017 poses a risk of over-supply to the market. Vacancies increased slightly in Dubai, from 8 per cent in Q4 2015 to 9 per cent in Q4 2016.”

Any hidden gems?

The mall has become that much bigger and brighter, and it looks like it has targeted any cranny that might have been hidden. So I will choose the sprawling Italian bistro cum hardware store, Eataly. It manages to combine the rustic nature of a pizzeria in Palermo with the commerce of Dubai (you can buy the breads, oils and pastas you are eating and the coffee maker as well) and the ostentation of Las Vegas as it overlooks the “Imagine” show on the creekside.

In conclusion

Festival City had to create a reason for people to cross the creek and it has succeeded in amalgamating a series of reasons to do that. It is a beautiful-looking space with many points of interest and if it’s not interest you want, it’s attached to Ikea. In the short term malls will be under pressure in the UAE, however Festival City has put itself back on the map for residents and tourists alike to take another look.

ascott@thenational.ae

To see Andrew Scott’s video of the new-look Festival City, go to thenational.ae/business.

Follow The National's Business section on Twitter