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AL MARYAH CENTRAL MARKET STUDY EXECUTIVE SUMMARY MAY 2018 THE KEY FINDINGS FROM THE INDEPENDENT MARKET RESEARCH UNDERTAKEN BY URBIS FOR THE AL MARYAH CENTRAL PROJECT ARE SUMMARISED IN THIS EXECUTIVE SUMMARY. AL MARYAH CENTRAL IS A SUPER REGIONAL MALL CURRENTLY UNDER CONSTRUCTION WHICH IS BEING Al Maryah Central The Galleria DEVELOPED ON AL MARYAH ISLAND BY GULF RELATED. © Urbis 2018 This publication is subject to copyright. Except as permitted under the Copyright Act 1968, no part of it may in any form or by any means (electronic, mechanical, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior written permission. Enquiries should be addressed to the publishers. URBIS.COM.AU URBIS.COM.AU REGIONAL CONTEXT Al Maryah Island is centrally located between Al Reem Island and Abu Dhabi Island and has been designated by the Abu Dhabi Government to be the new “Financial Free Zone” and CBD for Abu Dhabi. The island is around 100 hectares in size and measures 2.3 km from north to south and 600 metres from east to west. Dubai, which is 150 km to the north- east of Abu Dhabi City, presently provides the greatest concentration of retail and super-regional shopping malls in the region including amongst others, Mall of the Emirates and Dubai Mall. Part of the success of Al Maryah Central (AMC) will rest in its ability to change the higher order shopping habits of trade area residents. With the opening of new malls in Abu Dhabi over recent years, including Yas Mall, this trend is already occurring with a 2017 consumer research by the Brunswick Group indicating that almost two thirds of Abu Dhabi residents are now more likely to shop, eat and be entertained in Abu Dhabi than having to travel to Dubai. At the same time however, 30% of Abu Dhabi’s consumers still visit malls outside Abu Dhabi at least once a week with the main reason cited being for the entertainment options. A considerable amount of development on Al Maryah Island is already existing or underway. Plots are being progressively released over time to be developed into residential and commercial uses and when fully built-out Al Maryah Island is expected to be home to around 13,000 residents, 37,000 workers and over 1,000 hotel rooms. 3 Al Maryah Central Market Study Executive Summary The ongoing completion of the proposed thirteen bridges to Furthermore, the location of AMC on the western side of LOCAL Abu Dhabi Island and Reem Island will greatly enhance the Al Maryah Island provides a favourable location for food accessibility and appeal of Al Maryah Island and beverage tenants to take advantage of water and Abu Dhabi skyline views as exemplified by The Galleria, a key Overall, the location, site characteristics, accessibility and characteristic in attracting tourists and evening visitors. CONTEXT surrounding uses mean that this is an attractive site for a major retail centre. Strong population growth on Al Reem Island will also benefit the centre, as will the very high population densities to the west on Abu Dhabi Island. Gulf Related has a 37.5 acre site centrally located on Al Maryah Island on which it is developing a 293,500 sq.m GFA mixed use project comprising: ▪ The Galleria luxury mall (completed in 2013) with a GLA of 34,457 sq.m. ▪ Al Maryah Central (AMC), which will be a 150,340 sq.m GLA retail mall. ▪ A 350 room hotel/serviced apartment building and a 250 unit residential tower (to be completed in 2021/22). ▪ Two five star hotels: Rosewood Abu Dhabi and Four Seasons Hotel Abu Dhabi which opened in 2013 & 2016, respectively. ▪ The Abu Dhabi Global Market office precinct, completed in 2012 and comprising four premium office towers totalling 238,000 sq.m NLA. ▪ Adjacent to the Gulf Related site are: – The recently completed Al Mayrah Tower office tower. – A site committed for the NBAD commercial office tower. – The Cleveland Clinic Abu Dhabi, a 364 bed hospital which opened in March 2015. – Three residential towers to be developed by the Farglory Group and with the first tower currently under construction and due to be completed in 2019. Prepared by Urbis for Gulf Related 4 URBIS.COM.AU 5 Al Maryah Central Market Study Executive Summary DESCRIPTION OF THE PROJECT The Al Maryah Island Retail District includes two retail Abu Dhabi is for the entertainment options (46%). centres that will be seamlessly linked by a shopping Al Maryah Central’s extensive entertainment offer concourse connection and two sky bridges. should, in part, help to re-address this issue with a 21 screen VOX cinema centre, family and teen The market positioning of The Galleria, which opened entertainment centres, children’s activity zones and a in 2013, is decidedly upmarket with a strong emphasis public library. on luxury retail and food and beverage. The centre has been particularly successful in its leasing to first tier The mall will be aimed at the mid-market, with a far luxury tenants and dining which is attributable to a broader appeal than The Galleria, a consequence of its number of factors including the timing of the project; larger size and the market positioning of many of its it’s very high quality design and amenities together key anchor tenants. with its adjacency to the Abu Dhabi Global Market Considered together, The Galleria and Al Maryah (ADGM) complex and the surrounding development. Central should provide a very compelling retail offer The Galleria has a GLA of 34,457 sq.m. at a scale and quality that is presently lacking on Scheduled to open in August 2019, Al Maryah Central Abu Dhabi Island. The centre will also have other represents the major retail component of the Al advantages such as its growing on-site population of Maryah Retail Island District and on its own will have office workers, over 3,100 dedicated retail car parking approximately 150,340 sq.m GLA. spaces and its proposed public transport connections. In addition to having an enclosed retail offer, the centre Al Maryah Central represents the next generation via the promenade at The Galleria also provides some of mall for Abu Dhabi and from our assessment external retail and F&B (both licensed and unlicensed) it would appear to be of a superior quality to its with a waterfront setting that enhances its overall existing competitors in terms of its quality of finishes wider appeal to tourists. and ambience; its amenities (including rest rooms, changing rooms, sitting areas, Wi-Fi access, prayer rooms etc.); its simple and legible layout; its attractive façade and its extensive F&B and entertainment offer. According to Brunswick Group research, the most commonly cited reason for visiting malls outside The Galleria Prepared by Urbis for Gulf Related 6 URBIS.COM.AU ECONOMIC OVERVIEW The past two years have been challenging for Abu Dhabi Abu Dhabi’s position as a low-cost oil producer means rate of population growth within the UAE and Abu Dhabi with the ongoing effects of lower global oil prices adversely the emirate is well placed to continue its aggressive is strongly linked to its phase of economic growth. The impacting both economic growth and population growth infrastructure program. Furthermore, its substantial recovery in oil prices in 2018 should provide additional within the emirate and the city. Looking forward however, federal reserves should cushion the local economy in stimulus to the economy and help the government drive its the overall economic outlook for Abu Dhabi is positive the event of a major economic crisis. This should ensure diversification agenda forward. with real growth in GDP forecast at 5.1% per annum continued growth over the medium term. The resident base is relatively wealthy and the driven by expected increases in the price of oil and new Whilst oil continues to be an extremely important revenue fundamentals exist to support a number of new high quality infrastructure spending. Inflation is forecast to average source for Abu Dhabi, increasingly over time the economy retail centres, provided they are appropriately located, well around 3.3% per annum to 2022. will become more diversified and less reliant on oil. The planned and managed. Consumer Price Ination Real GDP Growth ABUD DHABI & UAE, 2006 2022 ABUH DHABI & UAE, 2003 2022 UAE 18% United Arab Emirates Abu Dhabi Abu Dhabi Non-Oil Sectors 16% Abu Dhabi Forecast 13% 14% Forecast Abu Dhabi UAE Abu Dhabi UAE 8% 12% 2006 to 2017 2017 to 2022 2006 to 2017 +4.3% p.a. 2017 to 2022 +5.1% p.a. + 4.1% pa + 3.3% pa 10% 3% 8% 6% -2% 4% -7% 2% 0% -12% 2006 2008 2010 2012 2014 2016 2018 2020 2022 2006 2008 2010 2012 2014 2016 2018 2020 2022 Source: Oxford Economics 2016; Statistics Centre - Abu Dhabi; Urbis Source: Oxford Economics 2016; Statistics Centre - Abu Dhabi; Urbis 7 Al Maryah Central Market Study Executive Summary TOURIST MARKET Abu Dhabi continues to grow as a tourist International tourists account for the The total tourist retail expenditure Delays to the development of the main destination, with international visitor bulk of Abu Dhabi’s tourist expenditure. market is forecast to increase by around retail centre on Saadiyat Island means growth at around 10% in 2017. This historic Urbis forecasts that international tourist 8.3% per annum (expressed in constant that Al Maryah Central is likely to be the growth path is supported by MasterCard visitation in the Abu Dhabi urban area will terms i.e. excluding inflation) through to favoured retail centre for tourists in the who ranks Abu Dhabi as one of the top increase steadily over the next five years, 2022.