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By: Adam Fitzpatrick, Associate Partner, Cavendish Maxwell Oman
Retail activity has gripped the region in the past 10 years with the construction of more impressive complexes, new grand retail malls, big retail concepts and entertainment centres to create family day experiences.
The change in Muscat, and Oman overall, has been no different as the shopping experience has evolved from the traditional souqs to more modern neighbourhood centres and larger mall concepts. Destination appeal is more important than ever as the more diverse shopping community of Muscat desires all the attractions of other capital cities.
But what does the Oman market really want and what does the market need?
A combination of traditional shopping mixed with a good blend of both modern and touristic retail is one shared view and objective.
The influx of new brands into the market has enabled the development of fashion avenues and bijoux destinations in the latest power malls 60,000 sq m in size and more, over the past 15 years. Although this has been very exciting, it has created some confusion: the market can only absorb a certain amount of new supply before the laws of diminishing returns start to affect the original success of a destination and its value. So where is the balance?
The key to future success is a full understanding of the purchase power of shoppers and the price points at which new brands in new malls can operate successfully. Retailers need to make a positive margin to survive and this will only be achieved through well priced products and sustainable rents for the shop operators.
The danger of building too much mall space at sizes that are too large are both real and very challenging at a time when the shopper is more discerning on price and value and the brands themselves are extremely cautious on margins.
Looking to the future, the opportunity for touristic retail is considerable in Oman and particularly in the capital.
Concepts for the redevelopment of the Mina Sultan Qaboos Waterfront will lead the way in this destination retail development. This will enable a different style of retail, combining old souq-style shopping with educational and leisure facilities in an environment sensitive to culture and traditions.
The beauty of this type of development is in the clever combination of local shopping requirements and habits with sensitive touristic attractions in a magnificent environment.
The city also holds significant development opportunities for retail in existing local neighbourhoods and in new mixed-use development destinations. In the busier lives that the resident population now leads, convenience is of paramount importance. Retail convenience drives local villa prices and protects value. This is the same in the office sectors and in wider mixed-use developments.
Muscat is fortunate. It has many niche opportunities for future development across the capital area. The key to taking these opportunities forward successfully is in understanding the retail component and the market.
Feasibility and in-depth retail impact studies are vital to ensuring that the market demands of the population are fully reflected in what is built for the future.
Looking forward, Muscat, and Oman on the whole, provide many experiences for the resident shopper. The key to success is understanding the shopper and the shopper’s market.
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