Thousands of Dubai residents may head down the Sheikh Zayed Road to Abu Dhabi every morning to work, but there is a sizeable flow of Abu Dhabi residents heading the other way to shop, according to new research.
One in five Abu Dhabi residents regularly leaves the capital to shop in Dubai, with 80 per cent of those shoppers in the high-income bracket, according to a report by DTZ, a global property specialist.
And the industry is not blind to the trend: retail space in Abu Dhabi is set to double over the next three years, DTZ said, having partnered the independent advisory company GMRC to survey residents.
Mall space in Abu Dhabi should grow from a current 709,000 square metres to 1.4 million sq metres by 2015.
Andrew Goodwin, the head of retail for the Middle East and North Africa at DTZ, said there was "significant leakage" of spending from Abu Dhabi to Dubai at the moment - a problem that would be solved by the growing level of retail in the capital.
"Abu Dhabi has not yet experienced the same level of shopping-centre development that has occurred in Dubai in either quantity or quality," said Mr Goodwin in his report, seen by The National.
"The poor offering of luxury retailing within Abu Dhabi has become particularly apparent since the opening of the luxury and upper marque-focused extension of Mall of the Emirates in Dubai and Dubai Mall with its extensive high-end offers."
The number of retail stores in Dubai has grown at a fast pace in the past 10 years, with the addition of hugely successful malls such as Mall of the Emirates, Dubai Mall and, more recently, Mirdif City Centre.
Retail space has increased 60 per cent in Dubai since 2005, according to Jones Lang LaSalle, and the per capita mall space is almost double the level in Abu Dhabi, which has the second-highest rate in the Middle East.
But a number of major projects are under way in the capital and are expected to be finished in the next few years, increasing both the quality and quantity of retail.
Residents are expected to benefit from greater fashion offerings, a better range of luxury stores and a number of waterfront dining venues.
Three malls are expected to be completed this year: Paragon Bay Mall on Reem Island; Capital Mall in Mohammed bin Zayed City; and Deerfields Town Square in Al Bahia.
Last week, Gulf Related and Mubadala Real Estate & Hospitality, a unit of Mubadala Development, announced they would bring a series of luxury brands to a new mall called The Galleria, set to open in August next year on Sowwah Square on Al Maryah Island. Mubadala is a strategic investment company owned by the Abu Dhabi Government.
Sorouh Real Estate, one of the biggest developers in Abu Dhabi, also announced last week it would launch Boutik, a branded mall concept, in many of its major developments.
Yas Mall is also expected to be completed by the end of next year, while a new Ace Hardware megastore is expected to open this year next to the new Ikea on Yas Island. Yas Mall will become the second-biggest mall in the Emirates behind Dubai Mall.
"The race to provide the long-awaited regional mall required by Abu Dhabi to stem the leakage of trade to Dubai is being developed by Aldar on Yas Island," said Mr Goodwin.
"The critical mass of this, coupled with adjoining leisure activities, will create a major destination for shopping in a new location and help to distribute the trade throughout the metropolitan area."
DTZ estimates Abu Dhabi's retail spending to be Dh17 billion (US$4.62bn) this year.
"As one of the fastest-growing and richest cities in the world, Abu Dhabi's retail market has grown considerably in recent years, reflecting an expanding population with greater disposable income," said Mr Goodwin.
Developers in the UAE continue to invest in retail developments as the sector has been one of the best-performing in the past year, with retailers enjoying year-on-year sales increases of up to 30 per cent.
Emaar is extending the size of Dubai Mall and Nakheel is looking at doubling the size of both Dragon Mart and Ibn Battuta Mall, as well as building Palm Mall on the Palm Jumeirah.
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