Role of Shopping Malls in Promoting Brands & Concepts

1. Role of Shopping Malls in Promoting Brands & Concepts BIFEX 2012 Beirut, May 23rd 2012

2. Shopping malls are among the most visited sites in the world Annual visitors to selected top tourist destinations, Millions Annual footfall of most visited Shopping malls, Millions Orchard Road Singapore Times Square, NY Central Park, NY Dubai Mall, Dubai Union Station Bintang Mall, KL Las Vegas Strip Niagara Falls Mall of America, USA Disneyworld Mall of the Emirates Dubai Grand Bazaar, Istanbul Notre Dame, Paris Westfield London Forbidden City, China Aventura Mall, USA Sacre Coeur Basilica Westfield Stradford Victoria Peak, Hong Kong Source: Web sites of shopping malls; annual reports of mall managers; Wikipedia

3. Dubai is at the forefront in shopping mall development in a region lagging behind versus developed markets 2010 Mall GLA / Capita (m2) USA 2,2 Australia 0,6 Dubai 1,4 Abu Dhabi 0,8 Doha 0,5 Bahrain 0,5 Riyadh 0,4 Sharjah 0,4 Muscat 0,4 Ajman 0,3 Jeddah 0,2 Beirut 0,2 Damascus 0,0 Cairo 0,0 Source: Majid Al Futtaim Properties internal market research

4. Shopping malls are a key factor for tourist attraction Key factors in decision to come to Dubai Extremely important Somewhat important Neither important nor unimportant Safety and Security 4% Somewhat unimportant Cleanliness of city 5% Good beaches/pools 8% Malls 10% Variety of Cuisine 10% Family activities available 15% Visiting friends/family 18% Good hotel deals 21% Nice weather 35% Good flight connections 23% Good holliday package 31% Specific event (e.g concert) 35% 100% Source: Market research conducted by Majid Al Futtaim 2011 – Dubai Malls

5. UAE Retail Sector |A progressive journey From Souks… … to street retail … to the ultimate mall experience UAE retail market size: Less than US$ 1 Bn. US$ 10 Bn US$ $50 Bn Sophistication and progress in line with tourism and business evolution Key international brands operating directly in the market (LV, Chanel, Prada, Cartier, etc.) Dubai is the 2nd highest ranked city in the world for Global retailers, behind only London according to CBRE (2012) Source: AlpenCapial Retail report 2011; Majid al Futtaim estimates

6. Dubai is part of the club of retail destinations *: MAFP Research **Ties with Kuala Lampur *** MAFP Research Source: UNWTO, Euromonitor, Retail International, MAF Properties Research

7. Middle East has become a top destinations for international brands Source: CBRE, 2011 Edition of ‘How Global is the Business of Retail’

8. Leading Dubai malls are world-class in terms of footfall and sales densities Strong footfalls in leading malls High disposable incomes reflected in high sales densities Tier 1 malls in Dubai offer a compelling business case for retailers (1) Estimates Source: corporate websites, MAF research

9. Malls are mainly visited during weekends and after working hours Weekdays Preferred day to visit a shopping mall Percentage of answers 13% 54% 33% Preferred time to visit a shopping mall Percentage of answers Weekends Weekedays + Weekends Evening (after 5 pm) Afternoon (2 to 5 pm) Shopping malls are a social hub for after work hours and weekends Midday/Lunch (11 am to 2 pm) Morning (before 11 am) Don’t have a preferred time Source: Market research conducted by Majid Al Futtaim 2011 – Dubai Malls

10. More than half of visitors come at least 2-3 times per week How often do you visit shopping malls ? Percentage, Dubai residents only Everyday 4-6 times Per week 2-3 times Per week Once a week 2-3 times Per month Once a month Less than Once a month Source: Market research conducted by Majid Al Futtaim 2011 – Dubai Malls

11. Shopping malls is much more than just shopping Main purpose to mall visits Percentage of respondents Retail Shopping • Less than half of the visitors come to shop as main reason to visit mall • Socializing and spending time with family is 2nd most important reason to visit mall. • Nearly 1 out of 10 came to mall to dine as main purpose Family Entertainment Sightseeing Socializing Relaxation Dining Adult entertainment Others Source: Market research conducted by Majid Al Futtaim 2011 – Dubai Malls

12. Profile of mall visitors in UAE Source: Market research conducted by Majid Al Futtaim 2011 – Dubai Malls

13. The Future of Shopping Malls? Much more than a place to shop • Generally, anything and everything one might want to buy, in the shopping malls • From the weekly/monthly household grocery shop, to music, gifts, fashion, home furnishing • Options and more Options: • Fast food, Casual, Fine dining • Cuisines from around the world • More than food – Experiences!! • Cinemas • Family Entertainment Centers • Live shows • Kids play areas • Unique Leisure Offers • Place to interact with friends and family • Interaction over coffee, entertainment, dining

14. Mall are more and more remembered because of their unique leisure What feature of the mall would you miss the most? Size of the font relative to frequency of response Mall of the Emirates Dubai Mall Source: Market research conducted by Majid Al Futtaim 2011 – Dubai Malls

15. Examples of NEW mall entertainment Wave House (indoor surfing and beach party) Cirque Du Soleil (UnibailRodamco, France) PlayNation – Skydiving, Bowling, Edutainment Ski Dubai – Mall of the Emirates (Dubai) Source: R&D project Majid Al Futtaim, web search, Mirdif City Center, Mall of the Emirates

16. Old entertainment with new twists: New Cinema experience • Screen numbers and IMAX are no longer competitive advantages. • Digital projectors are quickly becoming standard NEW !! • Seats are ‘5D’ – seats with vibration features that simulate real time action scene on the screen (e.g. car chase) • VIP rooms concepts are the rigueur – Rent cinemas for small parties of friends and family. • Bringing fine dining to the movie – dinners with menus related to movie themed, with offers of fine wine and freshly prepared on the spot by chefs Vox Cinema Gold Class (upcoming in Beirut City Center) United Kingdom examples Source: R&D project Majid Al Futtaim, web search

17. ‘Affordable excellence’ F&B through upscale casual dining • In the past, fast food (food court) was the predominant F&B offering in shopping malls • Current F&B trend is to bring upscale casual dining to the mall • Restaurants of celebrity chefs (Jamie Olivier, Gordon Ramsey) • Restaurants with ‘theatrics’ and ‘unique atmospheres’ that enhance experience Bread St. Kitchen Gordon Ramsey Zetter, Clerkenwell Barbecoa Jamie Olivier WaHaCa Mexican Street Food Th. Miers Source: R&D project Majid Al Futtaim, web search

18. Food Court? So yesterday, tell a story, sell a experience SINGAPORE • Food courts themselves are evolving: • From collection of fast foods (and often unhealthy) American chains in noise food court • To ‘themed ambiance’ spaces showcasing international food and healthy choices Source: R&D project Majid Al Futtaim, web search

19. Product manufactures are developing the direct retail channels • P&G developed line of products focused on men’s shaving • P&G had issues obtaining desired shelve space – both quantity and quality - in traditional distribution channels such as department stores or hypermarkets. • P&G decided to create their own direct retail channels to satisfy its needs, specially on creating a new brand Source: R&D project Majid Al Futtaim, web search

20. Apple retail stores are as much about branding as on sales channel Apple store in New York Apple store in Westfield London • 363 stores in 13 countries owned by Apple Inc. • Located in iconic high street locations and top shopping malls. • Each store can generate between USD 60 MM and 80 MM in annual sales. • Stores are considered anchors for a mall Apple store in Paris Source: Interview with Apple, web search

21. Mall architecture is evolving to adapt to new needs UNIQLO store Beijing Timberland store, UnibailRodamco, France Selfridges, Birmingham Louis Vuitton, ION Singapore Source: R&D project Majid Al Futtaim, web search

22. Brands have developed their own direct retail channels to ensure presence Vs. Multi-brand Electronic Retailer Direct Manufacturer Retail Channel Source: photos taken by Majid Al Futtaim research team

23. Electronic category has been at forefront of trend of direct channels Source: photos taken by Majid Al Futtaim research team

24. Malls are not only sales channels but key advertising space Source: photos taken by Majid Al Futtaim research team, web search

25. Winner malls will be those that apply key success factors • Update continuously the tenant mix to keep it fresh – 5%-10% annual turnover is healthy. • Attract the new anchors tenants – the cult brands (e.g. Apple, Abercrombie & Fitch). • Ensure convenience factors are in place – road access, parking, easy mall navigation. • Develop differentiator factor(s) – unique leisure, unique façade, unique anchor tenant. • Increase quality and quantity of Entertainment and Dining options – around 25% of the mall. • Architecture must adapt to need of tenants and create uniqueness: • Double ceiling shop fronts (to properly display brand) • Encourage Innovative shop front designs. • Creative mall facades with iconic mall entrances. • Quality control of fit out designs – mall developer must approve tenant designs. • Design with environment in mind – public demands it and it could be cost efficient. • Integrate latest information technology – Large digital screens, WiFi, visitor tracking. • Keep the mall fresh with live events, campaigns, community involvement. • Integrate ‘Brick&Mortar’ and ‘Online’ worlds – social networks and loyalty programs are key Source: Majid Al Futtaim

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