Abu Dhabi residents spend an average of nearly US$5bn on retail goods each year, but 20 percent still prefer to travel to Dubai to do their shopping, according to a report by a leading real estate consultancy firm. Real estate consultants at DTZ estimated that Abu Dhabi’s retail spending is around AED17bn (US$4.6bn). Despite this, the UAE capital “must look to improve the overall standard of retail offer in both its destination mall and luxury goods offer,” the report said, pointing to the fact around a fifth of Abu Dhabi residents regularly opt to travel to Dubai for shopping trips. “This is mainly due to Abu Dhabi’s inability to match Dubai’s regional malls with their varied fashion offers and adjoining leisure activities,” DTZ said. The report is hopeful that the opening of new regional malls, such as Yas Mall, and the increase in retail space by 137 percent over the next two years will help stem the flow of shoppers to Dubai. The supply of new stock will surge from 135,548 sqm in 2012 to 322,000 square metres in 2014. This potential threat of oversupply is also being addressed by market diversification in to these niche sectors, the report said. The market is currently dominated by five modern and established mid-market retail schemes, namely Marina Mall, Abu Dhabi Mall, Al Wadha Mall, Khalidiya Mall and Mushrif Mall, with the top three accounting for close to 60 percent of the total primce mall space. Yas Mall is set to open in 2015 and Dalma Mall is in the process of reviewing its brand lineup. The opening of the upper marque extension of Mall of the Emirates and Dubai Mall has increased competition from Dubai, but Abu Dubai is fighting back with the opening soon of The Galleria at Sowwah Square, developed by Mubadala in partnership with Gulf Related, and the retail areas in Etihad Towers and Nation Towers. “There is a significant pipeline of retail and this will have an impact on the value and orientation of future schemes in Abu Dhabi. Off island malls will diversify away from fashion and have a community focus,” said Andrew Goodwin, DTZ’s head of retail Middle East and author of the report. “The luxury sector is developing differently to Dubai’s model. In the absence of having large destination malls to open flagship stores, luxury brands will open in smaller schemes that become specialized destinations,” he added.