Retail Blog®

The following is an extract from ‘Shopping Centers Today’ June 2010 by Bennett Voyles

DEVELOPERS SAY OIL AND TOURISM COULD MAKE LIBYA A RETAIL HOT SPOT

Libya is a retail desert now, but some overseas developers and retailers believe it will soon prove tremendously fertile. Certainly, on paper it appears so. The North African country of 5.5 million sits atop a 43 billion-barrel supply of oil and boasts a significant population of expatriates employed to pump that oil out of the ground. GDP per capita is high by African standards: over $14,000 per year — about the same as Russia or Mexico.

None of this has escaped the notice of European and Middle Eastern developers. Some 205,000 sq.m. of  major retail projects are now in the planning stage in and around Tripoli alone, according to Retail International® , a London-based consulting firm that specializes in the Middle East and North Africa. British, Turkish and Arab development firms are among those exploring this market.

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Retail International® are one of the first retail consultants to explore the Libyan market, completing in depth market research and feasibility studies for modern shopping malls in Tripoli since 2006.The firm continues to monitor the market and produces regular reports on this emerging market.

RECON Middle East & North Africa May 2-3, 2010 Dubai.

The Global Shopping Centre Convention of the Middle East and North Africa

Retail International^®’s Founder and Principal, Simon THOMSON CRE, will be participating at the  RECON MENA convention as a panellist on Day 2.

RECON MENA is a rebranding of the former Middle East Council of Shopping Centres (MECSC) Conference held annually in Dubai.

Simon was a founding director of the MECSC.

Cairo Retail Report April 2010

Retail Supply Outstripping all Others

Despite the gloom of 12 months ago the new decade is emerging with the MENA retail market relatively unscathed and in certain markets within this vast region on notes that indicate underlying buoyancy.

Notably the UAE continues to provide the bulk of future supply over the next five years, followed closely by the North African countries, especially Egypt.

The Annual Report 2010 by Retail International® reveals some 10.3 million square metres of mall Gross Leasable Area (‘GLA’) has been completed across the GCC – up from 9.5 million square metres a year ago. The total across the MENA region is approaching 12 million square metres with a further 8.5 million square metres under development or in the detailed planning stages.

Simon Thomson, Founder and Principal of Retail International® singles out Cairo as being the one city “that outstrips all others in real terms of projected new organized retail floor space” with over 1.9 million square metres due to be added to the existing stock by 2015. This represents an increase of some 400% from today’s relatively low base of 622,000 sq. metres GLA to over 2.5 million sq. metres GLA within the next five years.

With a growing population of some 80 million with more than 15 million and 4 million in Cairo and Alexandria respectively, and an expanding economy it is no surprise that the retail spotlight is shining on the parched retail landscape of Egypt.

Latest forecasts suggest that Real GDP growth is projected to rise to 5.8% in 2010/2011, from around 5% in 2009/2010, based on nominal GDP of LE1198 billion (US$219 billion) in 2009/2010 and LE1377 billion (US$251 billion) in 2010/2011.

There is also encouragement from retailers such as Landmark Group announcing in April 2010 plans for a massive expansion drive in the MENA with the opening of an additional 150 stores in a $150m plus expansion that includes an increased presence in Egypt.

East Cairo is set to take the bulk of the planned new shopping malls, with some 1.3 million sq.metres GLA under development or planned compared with some 700,000 sq. metres west of the Nile.

These include such projects as UpTown Mall, Cairo Festival City, Sorouh City and Cairo Financial Center in the East and Mall of Egypt, Mena Mall and Westown in West Cairo.

Retail International® has advised SODIC, the leading Egyptian developer with regard to Westown and its ‘twin’ Eastown located in Shk. Zayed City and Katameya respectively with a combined GLA of some 200,000 sq. metres.

Despite all this development the projected density of organised retail space in Cairo at 2015 is forecast to be only 14 sq. metres GLA per 100 head of population compared with Dubai at 191 sq. metres GLA per 100 head of population. This reflects the huge difference in spending power per head between the two cities but if real GDP continues to grow in Egypt the outlook for retailing in Cairo looks bright.

This latest and 18^th Annual Report by Retail International®, in a departure from previous years is presented as a strictly data driven document with a host of key facts illustrated by high quality graphics and charts.

Simon Thomson, Founder and Principal of Retail International® speaking from London on publication of the Annual Report said “this year the Annual Report concentrates on providing the hard core raw data that the retail real estate industry needs at a time when the international economic outlook is still uncertain.” He continued, “facts are indisputable and provide an element of certainty which retailers and investors require in a time of market instability and speculation”.

The survey reveals some 10.3 million square metres of mall Gross Leasable Area (GLA) has been completed across the GCC – up from 9.5 million square metres a year ago. The total across the MENA region is approaching 12 million square metres with a further 8.5 million square metres under development or in the detailed planning stages.

Whilst Dubai continues to feature, the greatest growth in percentage terms over the next five years is expected to come from Abu Dhabi and Doha in The Gulf, and Tripoli, Libya in North Africa. The latter is hardly surprising due the negligible existing base of modern organized retail in Tripoli.

The one city however that outstrips all others in real terms of projected new organized retail floor space is Cairo with over 1.9 million square metres due to be added to the existing stock by 2015.

The report concludes that Libya and Syria are continuing to relax controls making these two relatively undeveloped markets as exciting opportunities for developers and retailers along with scope for more international brands in Tunisia and Morocco.

The full report can be obtained free from www.retailinternational.co.uk

Retail International® has recently completed a major assignment in Tunis, the capital city of Tunisia.

Located on the north coast of the African continent, Tunisia forms part of the Maghreb group of Arabian countries that also include the likes of Libya and Algeria. Situated on the Mediterranean Sea, Tunis enjoys a milder climate than its harsh hinterland of the Sahara Desert. Economically the country enjoys strong links with the European Union and particularly its former colonists, France and Italy.

Unlike its oil rich neighbours, Tunisia has no significant hydrocarbon deposits and its economy relies on manufacturing and the service industries where, due to low labour costs and proximity to Europe, it offers an attractive alternative to China or Turkey. This is particularly so in the garment industry where special tax free zones have been set up by the Government enabling a substantial manufacturing base to be established in the country for many famous brands including Benetton and other familiar brands.

The project upon which Retail International® has been advising forms part of  a multi-billion dollar mixed use project that also includes sports facilities and international standard golf courses. Retail International®, undertook an in depth economic and market study of the retail sector in Tunisia and the capital city in particular. This has resulted in proposals for a a regional sized shopping mall supported by hotels, offices and residential.

The mall is likely to be some 100,000 square metres gross leasable area and anchored by several international department stores and many brands new to Tunisia.Until recently, franchising in Tunisia has not been possible due to strict Government regulations. These are being relaxed and opportunities for new franchisors are opening up.

Retail International® Annual Report 2010

Rush results from the Retail International®  Annual Report 2010 show some 10.3 million sq.metres Gross Leasable Area completed or soon to be completed in the GCC with a further 5.4 million sq. metres either under development or in the final planning stage. Unlike previous years, the latest survey from Retail International® does not show the more speculative projects shown in the past by RI as either Probable or Possible. In the current economic climate ’such schemes are too far into the future’ says Simon Thomson  ’and some may now never come off the drawing board’. Full details will be published shortly.

‘Syria Today’ published a great article describing the retail market in Syria including data and commentary by Simon Thomson and Retail International®.

Follow the link :

http://www.syria-today.com/index.php/june-2009/332-business-features/1730-retail-therapy-

“Mail on Sunday” 1 November 2009 report on alleged discussions between Tesco and Tony Blair over a Middle East role for the former Prime Minister.

Retail International®’s Simon Thomson invited to comment.

Full story from “Mail online:

http://kaysblog.dailymail.co.uk/2009/11/tony-blairs-talks-with-tesco-over-1million-middle-east-supermarket-deal.html

Cairo Festival City.

Source: Al Futtaim Group

This latest embodiment of the Festival City brand from the Al Futtaim Group was launched on 14 October 2009 at a glittering presentation on site attended by Retail Guru.

Cairo Festival City will set new standards as Egypt’s premier indoor-outdoor retail, dining, living and entertainment destination. The total Gross Built Area upon completion will be 372,660 m² and a Gross Leasable Area of 180,000 m². This offers over 300 shops, a hypermarket, 17 international flagship stores, 17 screen cinema complex and parking for over 7,000 cars. The complex is expected to throw open its doors sometime in 2011-2012.

Retail International® has recently completed a survey of some 2,500 retail outlets in Dubai to determine the overall retail profile or merchandise mix of the city.

This is normally undertaken for a shopping mall rather than a whole city. Retail International® comment that the city’s profile closely matches the main malls with fashions – female and male – jewellery and electronics featuring most highly and typical of The Gulf generally.

Dubai Retail Mix Chart ©2009 Retail International®