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Apple   retail market presentation - 18 mar 13
 

Apple retail market presentation - 18 mar 13

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    Apple   retail market presentation - 18 mar 13 Apple retail market presentation - 18 mar 13 Presentation Transcript

    • UAE Retail Market OverviewMarch 2013
    • 1 Retail Market - UAE
    • UAE Retail Space by Emirate – Q1 2013 Northern Emirates 12% Abu Dhabi & Al Ain Dubai 33% 55% Total retail space in the UAE as of end Q1 2013 stood at 4.04 million sq m. The lion’s share of space exists in the Emirate of Dubai, representing 55% of the total retail stock, followed by Abu Dhabi with a share of 33%. The Northern Emirates (comprising of Sharjah, Ajman, Ras Al Khaimah and Fujairah) have a combined share of just 12%.
    • Retail Presence by CountryGlobal Rankings % of International Retailers Country Global Rankings -2011 2012 Present 2 UAE 53.1% 2 10 Saudi Arabia 41.1% 11 14 Turkey 39.0% 14 12 Kuwait 40.2% 13 27 Bahrain 30.4% 27= 27 Qatar 30.4% 29 40= Egypt 23.0% 41 49 Morocco 18.4% 49 64= Oman 12.0% 64= 70 Iran 5.5% 70 72 Libya 4.0% 72 73 Algeria 1.5% 73 Based on the CBRE survey, the UAE ranks second only to the UK based on the number of international retailers present. The UK remains the country which attracts most international retailers, with 57% of brands in the survey present in the country. However, the UAE is close behind on 53%.
    • 2 Retail Market - Dubai
    • Dubai Map
    • Dubai Retail Space Growth (1990 – Q1 2013) 2,500,000 2,215,219 2,000,000 GLA (sq m) 1,500,000 1,000,000 500,000 0 Prior to 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 1990 Until 1990, retail space in Dubai registered just 51,000 sq m, with much of this stock concentrated in traditional souks, small community and neighbourhood style retail centres. Mall based retail space started to increase from 1995 with the entry of Deira City Centre and the Burjuman Centre. Total retail space currently measures around 2.2 million sq m.
    • Dubai Mall Lease Rates Line Shop Anchor Shopping Mall Type (AED/sq m/annum) (AED/sq m/annum) Mall of Emirates 2,000 – 6,000 750 – 2,000 Deira City Centre 2,500 – 6,500 500 – 2,000 Mirdiff City Centre 2,000 – 4,500 400 – 1,600 Dubai Mall 3,000 – 5,000 1,000 – 2,000 Dubai Marina Mall 3,000 – 5,500 1,000 – 2,000 Prime rental rates for new leases are now typically around AED 2,000 – 4,500, down from around AED 5,000 - 6,000 during the peak. Since late 2008, retail lease rates have fallen across all retail types. However, declines have been less severe than other asset types, including residential and offices.
    • Retail Mall Occupancy Rates 100% 99% 98% 96% 96% 96% 94% 94% Occupancy (%) 92% 92% 88% 84% 80% Dubai Mall Mall of the Mirdiff City Ibn Battuta Deira City Festival Dubai Marina Emirates Centre Mall Centre Centre Mall Occupancy rates within major malls remain exceptionally high, typically over 90%. However, the opening of new malls has impacted performance within smaller centres. The best occupied malls at this time are the Mall of Emirates and Deira City Centre. Higher vacancy rates are likely within non-mall based concepts, as retailers continue to shift focus to high demand areas.
    • Retail Mall Footfall Figures (2012) 1,400 70 65 1,200 60 Annual Footfall (million) 1,000 50 Number of Stores 800 40 36 25 600 30 18 21 400 14 20 200 10 0 0 Dubai Mall Mall of the Mirdiff City Ibn Battuta Deira City Festival Emirates Centre Mall Centre Centre Total footfall in Dubai Mall reached 65 million during 2012, up from around 54 million during 2011 (this equates to 54,000 visitors per shop unit). The second busiest mall was Mall of Emirates with just over 36 million visitors during 2012.
    • Future Retail Supply (2013 – 2016) 600,000 500,000 503,506 400,000 GLA (sq m) 300,000 294,067 200,000 151,000 100,000 58,439 0 2013 2014 2015 2016 TOTAL Around 503,500 sq m of new retail GLA will be handed over in the Dubai market during the period 2013 – 2016. This will increase overall retail supply from the current 2.2 million sq m up to over 2.7 million sq m by end 2016.
    • Major Existing Retail Developments Timeline of deliveryName of the Deira City Centre Wafi City Ibn Battuta MallDevelopmentCompletion Date 1995 2001 2005Location Port Saeed Oud Metha Sheikh Zayed RoadRetail Space (GLA sq 115,000 44,600 110,000m)Number of Units 370 350 270Occupancy Rate1/ 97% 94% 90%Weekly Footfall1/ 411,000 N/K 275,000Note: 1. CBRE estimates
    • Major Existing Retail Developments Timeline of deliveryName of the Mall of the Emirates Festival Centre Dubai Outlet MallDevelopmentCompletion Date 2005 2007 2007Location Al Barsha Umm Ramool Al Ain RoadRetail Space (GLA sq m) 230,500 200,000 65,000Number of Units 520 600 240Occupancy Rate1/ 99% 94% 89%Weekly Footfall1/ 692,000 480,000 125,000
    • Major Existing Retail Developments Timeline of deliveryName of the Dubai Mall Dubai Marina Mall Mirdiff City CentreDevelopmentCompletion Date 2008 2008 2010Location Downtown Burj Khalifa Dubai Marina MirdiffRetail Space (GLA sq m) 350,300 31,500 196,000Number of Units 1,200 160 430Occupancy Rate1/ 91% 85% 96%Weekly Footfall1/ 1,250,000 N/K 350,000
    • Major Upcoming Retail Developments Timeline of deliveryName of the The Pointe Mall Agora Mall Palm MallDevelopmentCompletion Date 2015 2014/2015 2016Location Palm Jumeirah Jumeirah Road Palm JumeirahRetail Space (GLA sqm) 136,000 21,100 160,000Number of Units 195 N/K N/K
    • 3 Abu Dhabi - Retail Market
    • Abu Dhabi Map
    • Abu Dhabi Retail Space Growth (1990 – Q1 2013) 1,000,000 975,954 900,000 800,000 700,000 GLA (sq m) 600,000 500,000 400,000 300,000 200,000 100,000 0 1990199319941996199719981999200020012006200720082009201020112012 Q1 2013 From a restricted historic supply picture, the retail offering in the capital has grown significantly over the past five years to reach 976,000 GLA sq m. The highest increase in retail space was observed in 2010 with the soft opening of Dalma Mall in Mussafah offering circa148,000 GLA sq m.
    • Mall Lease Rents Shopping Mall Line Shop (AED/sq m/year) Abu Dhabi Mall 2,800 – 3,500 Al Raha Mall 2,000 – 2,750 Al Wahda Mall 2,500 – 3,500 Dalma Mall 2,200 – 3,000 Khalidiya Mall 2,500 – 3,200 Marina Mall 2,800 – 3,500 Mazyad Mall 2,200 – 2,800 Mushrif Mall 2,500 – 3,200 Retail lease rates within malls can obviously vary dependant on the retail type with F&B units potentially seeing differing rates to standard in-line stores. Lease rates within the major malls are observed to range between AED2,800 – 3,500, although rents will vary dependant on factors such as unit sizes, type of retailer, lease structure, etc.
    • Retail Mall Occupancy Rates 100% 100% 90% 95% 97% 95% 90% 80% 70% Occupancy (%) 60% 50% 40% 45% 30% 20% 10% 0% Abu Dhabi Mall Al Wahda Mall Dalma Mall Khalidiya Mall Marina Mall Mushrif Mall Retail space in Abu Dhabi City is close to full capacity, with occupancy rates reaching around 97 - 100% percent within Abu Dhabi Mall and the Marina Mall. However, malls located off-island such as Al Raha Mall, Bawabat Al Sharq and Dalma Mall are still suffering from low occupancy levels.
    • Future Retail Supply (2013 – 2015) 750,000 730,950 600,000 GLA (sq m) 450,000 392,400 300,000 150,000 196,150 142,400 0 2013 2014 2015 Total Retail space (GLA) within Abu Dhabi city is expected to increase from 976,000 sq m in Q1 2013 to circa 1.7 million sq m by 2015. With rising retail supply, mall owners will see tighter competition and the demarcation of quality retail space will become more apparent.
    • Retail Mall Footfall Figures (2012) 450 25 400 350 19.2 20 Annual Footfall (million) 17.5 300 Number of Stores 12.8 15 250 10.5 11.2 200 10 150 100 5 50 0 0 Abu Dhabi Mall Al Wahda Mall Khalidiya Mall Marina Mall Mushrif Mall By end 2012, total footfall in Marina Mall reached 18.7 million equating to roughly 46,750 visitors per shop unit. Abu Dhabi Mall also enjoys higher footfall amongst similar retail schemes with over 16.3 million visitors.
    • Major Existing Retail Developments Timeline of deliveryName of the Abu Dhabi Mall Al Wahda Mall Khalidiya MallDevelopmentCompletion Date 2001 2007 2008Location Tourist Club Area Airport Road KhalidiyaRetail Space (GLA sq 80,500 56,000 52,000m)Number of Units 220 450 160Occupancy Rate1/ 100% 90% 95%Weekly Footfall2/ 340,000 230,000 197,000
    • Major Existing Retail Developments Timeline of delivery Madinat ZayedName of the Development Mina Centre Marina Mall Shopping CentreCompletion Date 1999 2000 2001Location Madinat Zayed Mina BreakwaterRetail Space (GLA sq m) 26,500 35,000 164,000Number of Units 450 50 400Occupancy Rate1/ 90% 92% 97%Weekly Footfall2/ n/a n/a 390,000
    • Major Existing Retail Developments Timeline of deliveryName of the Dalma Mall Mushrif Mall Bawabat Al Sharq MallDevelopmentCompletion Date 2010 2011 2011Location Musaffah Mushrif BaniyasRetail Space (GLA sq 147,629 36,400 94,080m)Number of Units 400+ 300 423Occupancy Rate1/ 45% 95% 45%Weekly Footfall2/ n/a 216,000 n/a
    • Major Upcoming Retail Developments Timeline of deliver yName of the Capital Mall Central Market Paragon Bay MallDevelopmentCompletion Date 2013 2013 2013Location Musaffah Khalifa Street Reem IslandRetail Space (GLA sq m) 60,000 48,000 60,000Number of Units 406 170 120
    • Major Existing Retail Developments Timeline of delivery Deerfields TownName of the Development The Galleria Mina Plaza SquareCompletion Date 2013 2014 2014Location Sowwah Square Mina Zayed Al BahiaRetail Space (GLA sq m) 28,050 29,100 153,290Number of Units 1101/ 45 220
    • Major Upcoming Retail Developments Timeline of deliveryName of the Development Yas Mall Reem MallCompletion Date 2015 2016Location Yas Island Reem IslandRetail Space (GLA sq m) 192,400 200,000Number of Units 500 600
    • Entry Methods Franchise Agreement (Joint venture with major franchise operation). Local Sponsor (51% / 49% - joint venture agreement with another local company). Independent (no formal local partner).
    • Franchise Agreement Most common system for setting up retail operations in the UAE. Major players include Al Shaya, Al Thayer, Chaloub, Landmark and Azadea.Positives Low risk (financially) with low initial capital expenditure for start up costs (property, leasing and cap-ex), limited liability for daily operations and management and no liability for the profit and loss of the business. Buying power of the franchise to minimise roll out costs. Instant cash flow and access to long-term residual income streams. Income calculated on the basis of gross sales and not necessarily profitability.Negatives Potential dilution of the brand and misuse of IP (logos, trade marks, etc). Lack of control over brand identity and integrity. Lack of control over staff training.
    • Local Sponsor (Joint Venture) Only UAE nationals or corporations wholly owned by UAE nationals or those with a UAE partner or sponsor are permitted to carry out operations. JV with major local sponsor (Dubai Holding, Emaar, Jumeirah Group, etc). Variations of JV structure (silent partner, fixed annual payment, profit share and or a mix of).Positives Benefit of the sponsor for negotiating, visa’s, preferential licensing, etc but without the loss of control associated with a franchise agreement. If high profile Government entity - top cover and assurances ’get out of jail free card’ if required. - Strength of partner but without full franchise control.Negatives Still requires a 51% / 49% agreement (on paper but negotiation of terms possible). Potential for some loss of control of brand and IP.
    • Independent Standalone brand without local sponsor.Positives Maintain full ownership 100% structure and profits No requirement for 51% local ownership. Maintain full brand control. Potential to leverage Apple global brand without any restrictions.Negatives No local bargaining power (although global brand strength should mitigate this). Higher financial risk with potential upfront expenditure required (property, leasing and cap-ex). Potential issues in attaining Visa’s, licenses and general administrative duties. Untried model in other emirates and regional markets.