Demand for shop space has been strong with two thirds of the development already leased.
New retailers rush to Paragon Bay
ABU DHABI // Shoppers in the capital will have a new mall to visit on Reem Island shortly, with more than half its retailers and restaurants making their debut in Abu Dhabi. Paragon Bay, located in the Marina Square project, is on track to open on time in the first quarter of next year, said Frank Lazorchak, the general manager of Paragon Malls, which is the shopping centre division of the property developer Tamouh.
He did not have figures for the cost of the project. Demand for spots in the 60,000 square metre, three-storey mall has been strong and about two-thirds of the development has been leased, he said. The Emirates has been ranked among the world's top five emerging retail markets, according to the management consultancy AT Kearney, at least partly because of Abu Dhabi's pending residential and cultural developments.
Projects such as the Guggenheim and Louvre museums on Saadiyat Island and the office and residential towers on Reem Island will provide a captive audience requiring retail services. "It makes a lot of sense if you are putting a new city up, which Reem Island is, that you put in the necessary social infrastructure around it as well, which includes retail," said Robert Ziegler, the vice president of AT Kearney in Dubai.
The Tamouh group is selectively choosing retailers to provide the right mix and plans to open the mall with 75 per cent of its units open. Most malls do not open fully leased, Mr Lazorchak said, adding that all of Paragon Bay's slots should be filled by the end of next year. "Abu Dhabi is a hot spot for retail expansion in the UAE," Mr Lazorchak said. "The retailers who we are talking to, most of them are the big groups from Dubai and everybody knows Abu Dhabi is the big next step - especially with the shops and services that are not here yet."
Abu Dhabi is what industry experts call "under-shopped", said Mr Lazorchak. Many Dubai retailers signing up for shops in Paragon Bay estimate as much as 40 per cent of their current retail sales come from Abu Dhabi residents, he said. "Retail sales are going to Dubai now because of the unavailability and choice of the stores here," he said. "For example, if you want to go to [the clothing retailer] Ted Baker, you have to go to Dubai."
It was this gap that inspired Mr Lazorchak's leasing strategy. Paragon Malls sought out retail brands that were either new to the UAE or to Abu Dhabi. While he would not disclose brand names, he said the 4,000 sq metre hypermarket in Paragon Bay would be occupied by an upscale French grocery chain new to the Emirates. The 3,500 condominiums and the five-star hotel in Marina Square, which are connected to the mall, will also provide its retailers with a guaranteed customer base, he said. The residential units are all leased and should be fully occupied by the end of next year. About 12,000 people will be living and working in Marina Square by the end of next year, he said.
Paragon Malls is also building a two-storey complex of 45 shops in Meena Plaza, located in the Mina Zayed area of Abu Dhabi. Two additional malls are planned for Tamouh's other developments on Reem Island, Mr Lazorchak said. firstname.lastname@example.org