Construction on retail projects worth billions of dirhams is set to stall in Damascus following the Arab League's imposition of economic sanctions on Syria.
Emaar and Majid Al Futtaim, two of the UAE's biggest retail and leisure developers, both have huge projects under construction that analysts say will have to be put on hold for the foreseeable future.
"The projects will happen. They will still be built and will still be successful," said David Macadam, the head of retail for the Middle East at Jones Lang LaSalle. "But for now, [the developers] will want to create a low profile, carry on with back-office options [and] with planning and design, but not anything else."
Majid Al Futtaim, which operates malls and Carrefour stores in the Middle East, began work in July on a US$1 billion (Dh3.67bn) retail, leisure and commercial complex in Damascus, despite the civil unrest that was already under way. Emaar has partnered with Invest Group Overseas to build The Eighth Gate, a mixed-use development that includes a massive shopping mall.
Both Majid Al Futtaim and Emaar declined to comment.
Mr Macadam said the retail opportunity was "huge" in Syria, but sales were expected to be weak this year. "I suspect retail sales are subdued [at the moment]," he said. "Retailers are probably being fairly cautious in buying stock. Everything just slows."
The unrest has already deterred UAE retailers and entertainment companies from entering Syria. Paris Gallery, the luxury retailer based in Dubai, has scrapped plans to roll out stores, having launched one in Aleppo before the unrest began.
The Grand Cinemas chain, which is active in the UAE, Lebanon and Jordan, said it was assessing plans to launch in Syria.
bflanagan@thenational.ae
