As we move into the second half of 2025, retail in the Middle East is being reshaped by a convergence of trends: urban development, sustainability, digital innovation, and shifting consumer behaviour. At Gensler, we’re working with nearly every major developer across the region, helping design future-ready retail environments that are not only commercial spaces but urban and cultural anchors.
Nowhere is this more apparent than in the rise of the “20-minute city.” This urban planning concept—where residents can access work, school, retail, leisure, and healthcare within a 20-minute walk or bike ride—is increasingly influencing the structure of our cities. In the GCC, it’s become a policy priority. In response, developers are embedding community malls directly into new residential districts from Dubai South to Riyadh’s Northern Gateway. These centers are not just places to shop; they serve as essential, walkable hubs of convenience and social cohesion. According to CBRE, footfall at community-scale malls in the GCC increased by seven percent year-on-year in the first quarter of 2025, underscoring the demand for localized, accessible experiences.
Complementing this shift toward the hyperlocal is a parallel boom in destination retail, especially in areas pegged for exponential urban growth. Major retail hubs are being planned or expanded near strategic nodes such as Al Maktoum International Airport and the soon-to-debut Jebel Ali Palm. These destination malls are being designed not simply as shopping centers but as mixed-use ecosystems integrating entertainment, wellness, fine dining, and cultural experiences. Gensler is currently working on the renovation of Nakheel Mall on Palm Jumeirah—an example of how legacy assets are being adapted to meet the expectations of the next generation of consumers.
Across the Gulf, mall renovation and repositioning projects are surging as developers respond to changing consumer expectations and a shifting urban landscape. Gensler is at the forefront of this transformation, leading projects that elevate existing structures into vibrant lifestyle destinations. At Nad Al Sheba Mall, Gensler transformed a partially built structure into a 500,000 sq. ft. pedestrian-first neighbourhood mall. This adaptive reuse project, opened in April 2025, is strategically designed to integrate retail with the community’s daily rhythms, connecting directly to residential zones, a mosque, and an upcoming public park. Gensler has acted as lead design consultant for projects such as Avenues in Kuwait and Bahrain, Riyadh’s 1364 AH Diplomatic Quarter and Nakheel Mall, Dubai.
Alongside renovation, large-scale new developments are dramatically expanding the Gulf’s retail footprint. In Riyadh alone, over two million square meters of new retail space are projected to be added by 2030, reflecting the city’s rapid urban growth and the Saudi Vision 2030 agenda.
Developers are no longer chasing scale alone. The focus has shifted to experience-driven formats that blend co-working, F&B, entertainment, and wellness. Destination malls like those emerging near Al Maktoum International Airport and Jebel Ali Palm are conceived as mixed-use ecosystems, anchored in lifestyle, not straight retail.
These investments are underpinned by robust market growth: the GCC’s retail market, valued at $309.6 billion in 2023, is forecast to reach $386.9 billion by 2028, with a CAGR of 4.6%. Developers are striving to differentiate in an increasingly saturated landscape by designing not just commercial spaces, but urban and cultural anchors.
Retail is also becoming a crucial pillar of sustainability in the region. What was once a marketing message is now a business imperative. Developers and tenants alike are embedding sustainability goals into core operations. For instance, Majid Al Futtaim has achieved LEED certification for 19 of its malls, saving more than 53 million kilowatt-hours of energy and over 141,000 cubic meters of water since 2018. Landmark Group and other major players are linking their retail portfolios to sustainability-tied financing, while tenants are increasingly demanding spaces that support their ESG goals. We’re seeing a growing number of retail operators aiming not only for LEED certification but for operational net-zero, aligning with broader national strategies such as the UAE Net Zero 2050 initiative.
This transformation is taking place within a broader context of economic growth. The GCC’s retail market, valued at approximately $309.6 billion in 2023, is projected to reach $386.9 billion by 2028. That reflects a compound annual growth rate of 4.6 percent. In the UAE and Saudi Arabia—two regional powerhouses—retail remains one of the key non-oil contributors to GDP. Luxury retail, in particular, is booming. In 2024 alone, the GCC personal luxury market hit $12.8 billion, a six percent year-on-year increase, and is forecast to reach $15 billion by 2027. UAE and Saudi Arabia account for nearly three-quarters of this market, with Dubai now ranking among the world’s top five cities for luxury retail performance.
But the biggest accelerant of change in the coming years will be the digital transformation of retail environments. Digital Experience Design—or DXD—is rapidly emerging as a cornerstone of new retail strategies. Smart parking systems, AI-powered wayfinding, and interactive screens that recommend products and destinations based on purchase history are all becoming standard expectations. This trend is inspired by innovations in markets like China, where facial recognition and personalized retail are the norm. In the Gulf, retailers are increasingly converting physical stores into experiential showrooms, with purchases finalized digitally. This hybrid model reflects changing consumer patterns: e-commerce in the UAE alone now accounts for twelve percent of total retail sales, with categories like electronics and grocery driving growth.
The convergence of retail and hospitality is another defining trend. Whether it’s boutique hotels layered over lifestyle malls, culinary academies integrated into food halls, or wellness destinations housed within luxury retail podiums, the lines between shopping, leisure, and living are blurring. This mirrors regional tourism strategies, such as Saudi Arabia’s Vision 2030 and Dubai’s 2040 Urban Master Plan, both of which prioritize the creation of livable, attractive cities for residents, tourists, and investors alike.
Ultimately, what we are witnessing is the emergence of a new retail paradigm—one that is localized, experience-led, environmentally responsible, digitally orchestrated, and deeply embedded into the cultural fabric of the Middle East. Retail is no longer just about selling products. It is about shaping places, strengthening communities, and delivering long-term economic and social value.
The next chapter of retail in the Middle East won’t look like the past. It will look like the cities we are building today—intelligent, inclusive, and designed for life.
By Todd Pilgreen, Principal and Co-Managing Director Middle East, APME Regional Practice Area Leader – Mixed Use & Retail Centers, Retail & Consumer Experience, Gensler