An Indian store salesman organises music cassettes at Kings Recording, a movie and music store in the Hamdan Cenre in downtown Abu Dhabi. Silvia Razgova / The National
An Indian store salesman organises music cassettes at Kings Recording, a movie and music store in the Hamdan Cenre in downtown Abu Dhabi. Silvia Razgova / The National

The once and future kings of retail



When Abu Dhabi's oldest mall, the Hamdan Centre, opened in December 1982, giant jewel-like lanterns shone over its main entrances like diamonds in the night, attracting Emiratis and expats alike to the capital's first serious alternative to the city's old souq.

More than just a mall, the Hamdan Centre represented a vision of the future. It was the Central Market of its day and an early example of what planners now describe as a "mixed-use development" that combined shopping, living and work in a single building.

Thirty years later, the lanterns are still there, but now they are cracked and broken and succeed only in attracting dust. The city has transformed itself in the intervening years, but at the Hamdan Centre, time has stood still, the calm eye in the storm of Abu Dhabi's breakneck urban development.

Nowhere is this more evident than at Kings Recording, the music shop that still operates from the mall's shadowy first floor. Alongside racks of vinyl that include classics such as Frank Sinatra's Come Fly With Me and Eric Clapton's 461 Ocean Boulevard, the back wall of the shop is packed with discoloured cassette tapes by artists such as Demis Roussos, Cliff Richard and Madness.

"They are popular with customers who have older cars," explains Hamzah Ansari, the shop's founder. Mr Ansari emigrated to Dubai from Iran before opening Kings Recording in January 1983.

One of the oldest stores in the mall, the shop has customers who no longer even live in the city. When he considers the business's fortunes and the passing of time, however, Mr Ansari takes a characteristically long view for a man who deals in ageing and increasingly obsolete technologies.

"Nobody in Abu Dhabi has this collection of music, but before the Gulf War, business was better," he says. "Everything is down now and we also have the problem with the internet. Everything here is the same."

For Erica Walshe, the Hamdan Centre's stasis is both a blessing and a curse. She dashes from one store to another with a sense of purpose that sets her apart from the shopkeepers who sit and chat outside their largely empty stores. Mrs Walshe has lived in Abu Dhabi "on and off" since 1994.

"I'm in a zone when I come into this mall," she explains. "I don't come here for a wander round. I get my bits and I go, but I could tell you what's in every one of these shops because they've been here forever and a day. This mall hasn't changed one bit." Mrs Walshe is shopping for cheap gifts such as T-shirts, mosque-shaped alarm clocks and condiment sets of Emirati men and women in a kandura and abaya.

"I buy little gifts for my family and friends. I get bits and bobs that aren't expensive that I know people will enjoy at home," she says."In the winter months, I might come here whenever I have visitors, but in the summer, I only come here when I'm going back to the UK."

Although Mrs Walshe lives in Abu Dhabi, her business interests mean she spends much of her time in Dubai, where she has specialist cosmetics concessions at three malls. She is an experienced mall tenant as well as a focused shopper.

"Abu Dhabi and Dubai look different, they feel different. It's chalk and cheese," she says."People go to Dubai for the experience. It isn't just about shopping. I can go to Mall of the Emirates or Dubai Malland my kids can go to Kidzania, or skiing, or even skydiving."

The Hamdan Centre is just one of a growing number of malls, including the Hamed Centre on Electra Street and the Rotana Mall in Khalidya, that were once landmark destinations in their own right, but are now starting to look increasingly like museum pieces in the rapidly changing retail landscape.

A similar picture is emerging for a generation of older malls in Dubai. Al Ghurair Centre, Burjuman Centre, Deira City Centre and Wafi Mall were the pioneers who helped to build Dubai's reputation as an international shopping destination.

Now, however, thanks to the overwhelming competition provided by new mega malls such as the Dubai Mall and Mall of the Emirates, the older malls' tourist trade has largely disappeared, customer numbers have dwindled and luxury brands have refocused, leaving what are increasingly viewed as neighbourhood malls in favour of larger malls.

"A lot of franchises are having to think about spreading their brands too thinly," explains Matthew Green of the global consultancy giant CBRE.

"Five years ago, you would have seen a rush by franchises just to get their brands in. Now that there are so many different centres in the market, they have to be more cautious about just where to put their brands."

Faced with an uncertain future, Dubai's older, smaller malls have started fighting for survival by embarking on an unprecedented process of repositioning, renovation, expansion and renewal.

At the Burjuman Centre in Bur Dubai, this transformation comes in the form of an 18,600-square-metreextension and the addition of a Carrefour supermarket, cinema and more food outlets.

When it opened in 1991, the mall quickly became associated with luxury brands and upmarket customers, but its sights are now set on attracting more shoppers, broadening its appeal and persuading them to spend more time at the mall.

Deira City Centre, once the landmark destination for tourists visiting Dubai, has embarked on a Dh22 million renovation and extension programme that has not only resulted in a new connection to the local Metro station, but has also seen a rebalancing of its stores with greater emphasis on more value-conscious brands.

The result is a diversified retail landscape in which smaller malls now have to focus on their immediate catchment area, on a point of difference, and customers who are largely domestic and mid-market, while the mega malls increasingly capture luxury brands and the international tourist dirham.

According to Mr Green, these changes are symptomatic of a wider "repositioning" of the mall market in Dubai.

"Some of the malls that used to be looked at as regional malls are having to look at their immediate catchment area, and reposition themselves to address their local demographic," he explains.

"Going back five or 10 years, those malls might have looked to draw in customers from across Dubai, but with the arrival of the mega malls, a lot of demand has been taken away."

The clearest example of Mr Green's "repositioning", however, is the 31-year-old Al Ghurair Centre in Deira, Dubai's original mall.

When it reopens, the mall will almost have doubled in size thanks to an expansion that will have created an additional 35,000 square metres of gross leasable area for 150 new stores, taking the total number to 350 outlets and 79,500 sqm of leasable space.

"We were once the big kids on the block, but 31 years is a long time in retail, particularly in an emerging market," explains David Thurling, vice president of malls at Al Ghurair.

"At one time, Al Ghurair Centre was the Dubai Mall of its day, that place that everybody went to.

"Emiratis fondly reminisce about coming to this mall as children, but times have changed."

Mr Thurling has spent more than 25 years working in the mall industry in Australia, South East Asia, and the UAE - including stints as the managing director at Nakheel malls and the vice president of malls for Emaar - but nowhere has the industry changed more quickly than in Dubai.

"The market here is growing up very fast," he says."What's happened in the last 10 years took 50 years in the US and in Australia, which have a far more mature shopping mall industry."

Although malls such as Dubai Mall and Mall of the Emirates continue to raise expectations and set new benchmarks internationally in terms of visitor numbers, size, space, and sales, maturity in the market will come only when the challenges facing older malls have been successfully overcome.

"That's the story of the older malls and that will be the story of the newer malls as we go forward," explains Mr Thurling.

"Everyone will have to confront this situation, whether that is us, Mall of the Emirates, or even Dubai Mall. At some point in time, those malls will also be older with significant competitors around them."

As the UAE's older malls prove, the challenge for mall operators and retailers is in maintaining a mall's relevance, and in being flexible enough to be able to evolve and respond to changing markets, fashions, tastes, and times.

However, the fate of malls is a serious challenge for governments as well, especially in cities such as Abu Dhabi and Dubai, where malls and shopping play such an important part in the urban economy, provide employment, dictate the form of the urban landscape and play a key role in people's social and cultural lives.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Recipe: Spirulina Coconut Brothie

Ingredients
1 tbsp Spirulina powder
1 banana
1 cup unsweetened coconut milk (full fat preferable)
1 tbsp fresh turmeric or turmeric powder
½ cup fresh spinach leaves
½ cup vegan broth
2 crushed ice cubes (optional)

Method
Blend all the ingredients together on high in a high-speed blender until smooth and creamy. 

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Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
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Specs – Taycan 4S
Engine: Electric

Transmission: 2-speed auto

Power: 571bhp

Torque: 650Nm

Price: Dh431,800

Specs – Panamera
Engine: 3-litre V6 with 100kW electric motor

Transmission: 2-speed auto

Power: 455bhp

Torque: 700Nm

Price: from Dh431,800

Fixtures (all in UAE time)

Friday

Everton v Burnley 11pm

Saturday

Bournemouth v Tottenham Hotspur 3.30pm

West Ham United v Southampton 6pm

Wolves v Fulham 6pm

Cardiff City v Crystal Palace 8.30pm

Newcastle United v Liverpool 10.45pm

Sunday

Chelsea v Watford 5pm

Huddersfield v Manchester United 5pm

Arsenal v Brighton 7.30pm

Monday

Manchester City v Leicester City 11pm

 

KYLIAN MBAPPE 2016/17 STATS

Ligue 1: Appearances - 29, Goals - 15, Assists - 8
UCL: Appearances - 9, Goals - 6
French Cup: Appearances - 3, Goals - 3
France U19: Appearances - 5, Goals - 5, Assists - 1

Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
The specs

Engine: Four electric motors, one at each wheel

Power: 579hp

Torque: 859Nm

Transmission: Single-speed automatic

Price: From Dh825,900

On sale: Now