Six years after the global financial crisis brought construction sites on Palm Jumeirah to a standstill, Nakheel is aiming to turn the man-made island into a shoppers’ paradise.

More than 2.1 million square feet of shops, bars and restaurants are set to open on the island – accounting for almost 20 per cent of the developer’s entire planned retail portfolio.

It is part of a plan to open 10,000 retail units across Dubai as it seeks to boost recurring revenues while reducing exposure to cyclical property markets.

“On Palm Jumeirah we are creating a shopping destination within the island and a waterfront dining experience that every tourist coming to Dubai will want to view,” said Omar Khoory, director of Nakheel Retail, in Dubai.

In addition to its three major retail developments on the island at Nakheel Mall, The Pointe and the Golden Mile, the developer is also adding food and beverage outlets at its Palm Views East and West projects. An 11-kilometre boardwalk around the island will also have retail concessions.

The Nakheel Mall, under construction on the trunk of the island is currently about 55 per cent leased according to Mr Khoory.

Waitrose and Vox Cinemas will be among the tenants, while talks are under way to secure an anchor department store.

Leasing is also under way on the Golden Mile strip where the Spinney’s supermarket group is fitting out its store. Other tenants will include Fitness First, and Shakespeare and Co.

Last week Nakheel reported first quarter profits had more than doubled to Dh1.35 billion, helped by its fast expanding retail portfolio.

The flurry of retail leasing activity on the island coincides with expansions at Dragon Mart and Ibn Battuta Mall that will include a vast indoor garden with a glass roof that can be opened during the winter months.

A wave of mall construction under way in the city is likely to put pressure on retail rents say analysts at a time of faltering consumer confidence and as the strong dollar also hits tourist purchases.

Still, Mr Khoory believes the company’s planned expansions in the city are located in areas of rising demand. “Shopping is lifestyle in Dubai,” he said. “It is entertainment. Maybe people are becoming more cost conscious and looking online, but that pushes retailers to give more attractive offers.”

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A decade-long retail boom has been built around UAE shoppers’ love of the mall. But a strong dollar, weakening consumer confidence and the rise of e-commerce are changing shopping habits.

This comes with millions of square feet of new mall space due to complete by the end of the decade, including what could be the most lavish shopping centre ever built in the form of the 8 million square feet Mall of the World to be developed by Dubai Holding. “We are seeing some signs of stress since late last year,” says Jayant Ganwani, chief executive of the Dubai-based Lals Group. “It effects different segments of the retail stratosphere in different ways. The fast-moving consumer goods and middle market items have seen far less attrition than the high-end haute couture conspicuous consumption items.” Double-digit passenger growth through airports in Dubai and Abu Dhabi, the tax-free salaries of residents and a rapidly expanding population have encouraged a wave of mega-mall development with a second wave of community mall construction following rapidly behind. But now retailers are facing the strongest economic headwinds since the financial crisis, stoked by a weak oil price and associated slowing economy. Last week the IMF cut its projections for the UAE’s economic growth to 3.2 per cent this year. It was the second time in six months that the IMF has revised its growth forecast for the UAE down from 4.5 per cent in October. Other oil exporters in the region face similar downgrades. “If there is a fear of recession the first thing that the consumer in the middle market does is start to hoard money in case they lose their job,” says Mr Ganwani, whose company owns the Homes R Us chain of furniture stores. “When they go through this phase they basically stop spending money on anything durable in nature – so electronics, furniture and fashion. That is what we are seeing at the moment.” The strong dollar is also crimping the purchasing power of visitors from the euro zone, while the collapse of the rouble has had a devastating impact of on the number of Russian tourists who visit and the amount of money they spend. Those factors are already combining to create tension in Dubai’s retail sector say consultants, as some retailers struggle to reconcile the rents they pay with declining till receipts. “The retail market continues to be constrained by the decrease in spending, restricting overall growth levels,” said Craig Plumb, the regional head of research at JLL, the international real estate consultants in its latest report on the Dubai retail sector. “We expect performance of the retail market to remain stagnant throughout 2015, following estimates of a slowdown in retail sales growth figures,” he said.

“In the end convenience is cost,” says Florian Mack, the co-owner of the e-commerce start-up lens.ae, which sells contact lenses online. That challenges the conventional wisdom of the UAE retail industry, which maintains shopping is a leisure activity in its own right – one of several reasons that shoppers have been slower to adopt online shopping than in other regions – together with a reluctance to trust the web with personal bank details. “We’ve been hearing that since we started,” says Hosam Arab, a co-founder of namshi.com, the online fashion and footwear retailer.

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Lals Group, the Dubai-based retailer that owns Lamcy Plaza, plans to open 10 Homes R Us Stores in Saudi Arabia as part of a major push into the kingdom.

The group has been in discussions with Saudi and Qatari partners to bring its home furniture brand to the country as UAE retailers face increasing competition domestically.

“Saudi with its 27 million plus population and the bulk of it in the middle market is ripe for us,” said the Lals’ chief executive, Jayant Ganwani. “We have seen a huge spurt in demand in Saudi Arabia in the last three months. It is one market that seems to be breaking away from the rest of the train in the GCC.”

Initial openings are likely to be Riyadh and Dammam, said Mr Ganwani in an interview at the company’s Jebel Ali head office.

A boom in mall construction has added millions of square feet in retail space across the UAE. But faltering consumer confidence, currency weakness in Russia and the euro zone as well as regional political tension has hit spending.

Lals operates about 2.5 million sq ft of retail space across the region with 30 outlets covering brands such as Daiso, Carter’s and Style Studio.

The regional retail industry is expected to be worth US$284.5 billion by 2018 with supermarket and hypermarket sales to top $59.3bn over the same period, according to Alpen Capital.

The rapid growth of the aviation sector has also been a big driver for retail industry expansion with airport-based duty free sales expected to increase to $6.6bn in 2018 from $3.9bn in 2013.

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Irish dairy farmers are looking to the supermarkets of the Arabian Gulf to help make up for 30 years of lost time.

The removal last week of production quotas first introduced by the European Union in 1984 is expected to trigger a huge increase in Irish dairy production – much of it destined for the Middle East.

Irish dairy exports to the Arabian Gulf could jump by 50 per cent over the next five years, predicts Michael Hussey, the Dubai-based regional manager of Bord Bia, the Irish food board.

Milk quotas were introduced in 1984 to reduce the so-called milk lakes and butter mountains that started to emerge in the 1970s, when European milk production outstripped demand.

Agricultural exporters such as Ireland and the Netherlands stand to be the biggest beneficiaries from the removal of quotas across the European Union last week.

“There will definitely be a big impact here,” said Mr Hussey. “The Middle East will be the target for much of the increased production.”

Total exports of dairy products from Ireland into GCC countries jumped 28 per cent last year to €247 million (Dh988.3m), according to Bord Bia estimates.

Irish dairy products such as Kerrygold butter and Irish Farmhouse cheese are increasingly visible on the region’s supermarket shelves.

The rise in Irish food exports to the Gulf will bring exporters from the country into closer competition with New Zealand, which dominates the regional market.

When milk quotas were introduced in 1984, Irish milk production was roughly the same as it is today – about 5.4 billion litres per year.

Over the same period, annual production in New Zealand surged to 19 billion litres from 7.6 billion litres.

The Irish agriculture minister Simon Coveney has described the removal of the milk quotas as “the most fundamental change to Irish agriculture in a generation”.

GCC markets such as the UAE and Saudi Arabia are drawing increased attention from global food producers as growing populations, rising incomes and improved land and sea freight connections stoke demand for imports.

A regional hotel building boom that has Dubai at its centre is also driving demand for food products.

The rapid growth in air travel to hubs such as Dubai, Doha and Abu Dhabi is making it easier for exporters to bring fresh produce from Europe, North America and Australasia to the dinner tables of the region at affordable prices.

Bord Bia last week hosted a group of buyers of food ingredients from Saudi Arabia and Kuwait, and plans to take another group of UAE companies to Ireland this year.

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SHARM EL SHEIKH // The chief of the world’s biggest advertising company has called for the Egypt the Future conference to become an annual event.

Sir Martin Sorrell, the chief executive of WPP, said it was important to have a “focal point” to track progress.

“It is very important for there to be a focal point for industrial development and investment and this could very well become a regular event,” he said in an interview on the sidelines of the Egypt the Future conference in the Red Sea resort city.

The event which brought together more than 2,000 delegates, heads of state and the chiefs of some of the world’s largest corporations, winds up today.

The conference, unprecedented in its scale for Egypt, was aimed at assuring potential investors that the rewards of investing in the country outweigh the risks.

The Arab world’s most populous country is emerging from four years of political chaos and political stagnation in the aftermath of the 2011 uprising that ousted Egypt’s long standing president, Hosni Mubarak.

He said that Egypt represented a big opportunity for WPP at a time of slow global growth in the advertising industry this year.

“This year continues to be tough,” he said. “So you look at a country with 90 million people that has good education rates, good consumer demographics good GDP growth. That is something companies will find very attractive. It is rare you find opportunities of this size from a fast growth market.

WPP was involved in organising the event through its stake in Richard Attias & Associates.

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SHARM EL SHEIKH // Yusuf Ali can see the charter planes take off and land from his souvenir shop near Sharm El Sheikh Airport.

It is crammed full of miniature mummies, luminous sphinxes and other Pharaonic curiosities. But there are no customers.

Those that do stray into his shop are typically wearing wristbands – the telltale sign of a holidaymaker on an all-inclusive deal.

Such packages are slowly draining the lifeblood from Red Sea tourism, squeezing profit margins to a pittance and encouraging tourists to consume everything at their hotels even as overseas visitors make a return.

“Everything is included so they only have some pocket money for shopping and excursions,” he says as another planeload of tourists just landed from Moscow spill out of a bus and into the lobby of an adjoining hotel.

The collapse of the Russian rouble, the slowdown in the euro zone and continuing attacks in the Sinai peninsula have all taken their toll on the hotels, restaurants and tour operators of the region. To attract wary tourists, hotels have been forced to offer all-inclusive deals at rock-bottom prices. So even as tourists start to slowly return, hotels are not reaping the rewards.

“The biggest problem with the Red Sea coast is the all-inclusive nature of bookings where in some cases you have dinner, bed and breakfast. Some operators include flights as well,” said Peter Goddard, the managing director of the hotel consultancy TRI. “So if you peel it all back, you will find the hotels are actually netting a ridiculously low amount.”

A recent poll of hotels by the consultancy revealed that less than 5 per cent of Sharm El Sheikh hotels were not offering all-inclusive packages.

The revival of the country’s battered tourism sector is key to attracting the foreign exchange needed to wean Egypt’s economy off external financial aid from the Arabian Gulf.

That is why the hotels and restaurants around the Sharm El Sheikh convention centre where the Egypt the Future conference got under way this weekend, have much riding on its success.

Thousands of delegates from around the world have flooded into the resort – providing a boost to the local tourism economy.

But its organisers had to draft in drivers from Cairo to shuttle attendees from their hotels to the convention centre where Egypt’s economic course is being plotted. There were not enough local drivers to go around, reflecting the contraction of the sector.

Ten years ago Sharm El Sheikh witnessed the deadliest terrorist attack in Egyptian history when 88 people were killed in a string of bomb blasts around the town. More recently the Sinai insurgency has frustrated early signs of a recovery on the Red Sea coast.

Once the premier winter sun destination of the region, half of its hotel rooms are empty in what should be peak season. Sharm El Sheikh had average room rates of US$45 in December, compared with $375 in Dubai.

Those hotels that are busy are forced to offer all-inclusive deals leaving little scope to boost margins through the sale of meals and drinks. That represents a key difference between the hotel model in cities such as Dubai where operators make money from food and beverage sales.

The decline of the rouble has been a particularly brutal blow for the hotels on the coastal road leading to the centre of Sharm El Sheikh. While the loss of Russian tourists is felt around the region, nowhere else are they such an important source market.

“The main risk I see for the tourism industry is not political risk. It’s what is happening in Russia,” says Jean-Paul Pigat, an economist at Emirates NBD. “It will also have some impact on Dubai but in my mind those Russians who go to Egypt on all- inclusive packages may be a little more sensitive to price changes and fluctuations in the currency.”

As shuttle buses unload tourists at the shops of the Nama Bay district, shop owners call out first in Russian and then in English.

Despite the country’s economic woes and weakened currency, Russian tourists are still everywhere to be seen, but they are not spending as much says Mr Ali.

“It is not like before,” he says unfolding a depiction of what he says is the world’s oldest calendar and pointing to the interlocking hands of the ancient Egyptians that represent each month.

It is a well-practised routine, even if these days there are fewer tourists to practice on.

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SHARM EL SHEIKH // Majid Al Futtaim is set to to embark on a massive mall building spree in Egypt as it prepares to open Africa’s first indoor ski slope.

It aims to have opened 55 supermarkets and hypermarkets across the country by 2019 as part of an 18 billion Egyptian pound (Dh8.67bn) spending plan. At present it has from its existing 11 properties in the country.

“Egypt is our second market and will see one of our largest expansions,” said MAF’s chief executive, Alain Bejjani, on the sidelines of the Egypt The Future investment conference in Sharm El Sheikh.

MAF has been both a driver and beneficiary of Dubai’s retail boom and is now developing its overseas assets while expanding its real estate, health care and finance units.

The UAE retail sector grew at 7.5 per cent last year, almost twice the rate of the wider region, to be worth an estimated $33bn. The group’s revenues rose 11 per cent last year to Dh25bn.

The company’s big push into Egypt is part of a wider expansion that has been spurred by the acquisition of the rights to develop Carrefour outlets in 38 markets as far apart as Russia and South Africa.

Now the Egyptian government has endorsed MAF’s five-year plan to expand across the country, adding another 300,000 square metres of retail space.

That will include the development of three malls and the expansion of its City Centre Malls in Alexandria and Maadi.

The Dubai retail conglomerate already has a major presence in the country, employing about 3,500 people.

Its flagship Mall of Egypt development, which will include Africa’s first ski slope – similar to its existing Ski Dubai located in the city’s Mall of the Emirates – is expected to complete early next year.

The mall will be built across more than 455,000 square metres and house 420 retailers.

Mr Bejjani was appointed to lead the group last month following the departure of Iyad Malas after six years.

MAF’s push into Egypt and other markets in Africa will be a big part of its plan to double its business in the next five years.

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SHARM EL SHEIKH // Majid Al Futtaim is set to to embark on a massive mall building spree in Egypt as it prepares to open Africa’s first ski slope.

It aims to have opened 55 supermarkets and hypermarkets across the country by 2019 as part of an 18 billion Egyptian pound (Dh8.67bn) spending plan. At present it has from its existing 11 properties in the country.

“Egypt is our second market and will see one of our largest expansions,” said MAF’s chief executive, Alain Bejjani, on the sidelines of the Egypt The Future investment conference in Sharm El Sheikh.

MAF has been both a driver and beneficiary of Dubai’s retail boom and is now developing its overseas assets while expanding its real estate, health care and finance units.

The UAE retail sector grew at 7.5 per cent last year, almost twice the rate of the wider region, to be worth an estimated $33bn. The group’s revenues rose 11 per cent last year to Dh25bn.

The company’s big push into Egypt is part of a wider expansion that has been spurred by the acquisition of the rights to develop Carrefour outlets in 38 markets as far apart as Russia and South Africa.

Now the Egyptian government has endorsed MAF’s five-year plan to expand across the country, adding another 300,000 square metres of retail space.

That will include the development of three malls and the expansion of its City Centre Malls in Alexandria and Maadi.

The Dubai retail conglomerate already has a major presence in the country, employing about 3,500 people.

Its flagship Mall of Egypt development, which will include Africa’s first ski slope – similar to its existing Ski Dubai located in the city’s Mall of the Emirates – is expected to complete early next year.

The mall will be built across more than 455,000 square metres and house 420 retailers.

Mr Bejjani was appointed to lead the group last month following the departure of Iyad Malas after six years.

MAF’s push into Egypt and other markets in Africa will be a big part of its plan to double its business in the next five years.

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The Egyptian president Abdel Fattah El Sisi will on Friday set out his plan to attract US$60 billion in foreign investment to the country four years on from the start of the Arab Spring.

But he will first need to convince his audience that risk – political, economic and currency-related – is under control.

The Egypt the Future Conference, which starts on Friday in the Red Sea resort of Sharm El Sheikh, is the country’s opportunity to deliver those assurances. It takes place against a backdrop of double-digit inflation, stifling bureaucracy and chronic youth unemployment.

“This is Egypt’s debutante ball,” said Jean-Paul Pigat, an economist at Emirates NBD. “After four years of economic stagnation, this is their big moment to come back to the world stage and show investors they are trying to do the right things.”

Global business leaders from corporations such as GE, Siemens and BP are due to attend the event. Christine Lagarde, the managing director of the IMF is also due to speak.

Delegates arrived on Thursday amid tight security and a heavy police presence throughout the resort, following a wave of recent bombings in the restive Sinai peninsula.

One of the largest contingents will be from the UAE, which has already delivered billions of dollars in aid to the country.

The Abu Dhabi conglomerate Senaat, the property developer Emaar, the retailer Majid Al Futtaim and the private equity house Abraaj are expected to emerge as key players among some of the projects being promoted at the event.

“There is support from the UAE government,” Hussain Al Nowais, the chairman of Senaat, said of Emirati participation at the conference.

“The UAE and Egypt have a strategic relationship – our leadership is committed to Egypt. So many projects are going on, on the government and private sides,” said Mr Al Nowais.

An 18-page pamphlet released by UAE authorities in the run-up to the conference describes Abu Dhabi’s deep involvement in engineering Egypt’s economic recovery.

In addition to direct financial aid, the UAE is “garnering economic and political support for Egypt” and providing technical assistance in designing its economic programme, partly by hiring expert consultants from around the world.

Egypt is seeking to attract a fresh wave of foreign direct investment as it weans itself off the $20bn it has received from the governments of the UAE, Saudi Arabia and Kuwait through central bank deposits, cash grants and project aid, according to World Bank estimates.

Officials in the Arabian Gulf and Cairo say they want to move economic assistance into a new phase, in which corporate capital from the Gulf helps to revive economic growth and create jobs.

The North African country’s cabinet this month approved a much-anticipated draft investment law aimed at slashing red tape and convincing would-be investors that now is the right time to invest in Egypt. More reforms are expected to be announced this weekend to drive the message home.

“We will be there not only to promote Egypt but also to promote ourselves,” said Osama Bishai, the chief executive of the Egyptian contractor Orascom Construction. “We will be there as a contractor and an investor.”

To get to the venue of the conference nestled on the shimmering shores of the Red Sea, delegates will pass through a city in lockdown, where policemen stand behind steel barriers and roadblocks are set up around every important intersection.

This risk is everywhere to be seen. This weekend will be all about the opportunity.

* With Reuters

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It is not often that my arrival at an airport is filmed by a waiting TV crew. But for a moment I feel like Rihanna.

Welcome to Egypt the Future. Or at least welcome to the welcome committee at Cairo International Airport.

A bored TV crew, it transpires, has been waiting all morning for someone, anyone, to arrive so they can get some footage.

Some of the biggest names in global finance are coming to Egypt this weekend to attend the investment conference that everyone has been talking about, but it’s clearly been a slow morning for arriving captains of industry. So instead of capturing Christine Lagarde or Jeff Immelt striding purposefully towards the future, they get me shuffling and dishevelled, pulling a trolley suitcase that has lost its extendable handle in a Mr Bean-like baggage carousel incident.

The ladies on the welcome desk give me the sort of slow up and down appraisal I recognise from my wife’s extensive repertoire of similarly withering looks.

It looks like the textbook “Are you really going out like that?” look. Or it could be the “I mean really, how many check shirts is it possible to own in one lifetime?” look.

They are all smiling, but with the sort of smile you use when talking to someone who has just lost a long-term pet.

Still, I get the full red carpet treatment – literally.

Everybody seems to be set to hospitality whisk speed. One takes my passport, another my bag and a third hurries away with my crumpled itinerary.

In the VIP arrivals, there is a large group of teenage pharaohs lounging lazily on the sofas waiting for the proper VIPs to arrive.

I meet one official after another, all effusively friendly and urging me to tuck into the waiting buffet laid out in a room furnished with the kind of chairs that you only ever see ambassadors or heads of state sitting on.

Some officials arrive, others leave.

“He is from The International,” says one to another solemnly.

“It’s actually The National,” I try to interject – but the conversation has moved on and more officials come to inspect the guy from The International.

The man from the local TV crew is still filming me sitting on a swanky sofa in what could be the most boring B-roll ever recorded in post-Arab Spring Egypt. Questions will surely be asked back at the studio when they produce their morning’s work.

Then the whisking recommences and we quick-step to the domestic terminal to fly to Sharm El Sheikh. We pass more groups of bored-looking teenagers dressed as pharaohs.

I’ve managed to bag what could be the last remaining seat on a flight to the Red Sea resort for the weekend of the big conference, and as we climb over the sprawling Cairo skyline I start to relax. Thirty minutes into the flight there’s still lots of Cairo skyline and we don’t seem to be gaining altitude. Then comes the announcement. The plane has technical problems and we need to return to the airport.

I hope the TV people are still there.

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