The recent opening of Festival Waterfront Centre marks a significant stage in the retail development of Dubai Festival Centre (DFC) and will eventually bring 550 shops onto the market.

Gulf News spoke to Phil McArthur, managing director for shopping centres and commercial real estate at Al Futtaim Group, about rental rates in the new centre, the threat of oversupply and how Dubai's retail sector compares to other cities.

Gulf News: Are you concerned that the opening of the Waterfront Centre and the upcoming completion of Dubai Mall and Mall of Arabia will create an oversupply of retail space? McArthur: I have some concerns about there being too much supply too fast, but on the other hand not everything that is being promoted will open - there is a lot of hype in the marketplace.

It's a little frightening to think that all this retail development could happen at once so we have to make sure that what we do is solid in its fundamentals. I think some developers are underestimating the complexity of doing something like this.

What is your opinion of the recent criticism levelled at mall operators for charging excessively high rates for store space? Any discussion about rent always has to be a discussion about sales. What gets retailers excited is the sales per square foot in malls in the Middle East - they are significantly higher than the average in the rest of the world.

Basically they know they can come here and make a profit. We are very cognisant that we don't want to put anyone out of business, but we also have to pay for the building and get a return on our investment.

What are the targeted footfall counts at the Festival Waterfront Centre and can you archive that considering traffic problems around DFC? Twenty to 25 million visits per year is the league we need to be in. That gives us enough volume to support the rental base for the centre. We won't hit this in the first year - it's a level we need to stabilise at, then build from there.

Access is extremely important. We've been very impressed at the number of customers coming here when we opened Ikea and HyperPanda because they've had to come through a very difficult complex of roadworks.

People in Dubai are okay with that, but there is a bit of fatigue so I think we'll have many more visitors when the (Ras Al Khor) bridge opens.

How does Dubai compare to other cities in terms of its retail offering? With all the choices people have in Dubai now, this is going to be the shopping capital of the world. When I was in Los Angeles last week I went to see some of their greatest shopping centres and I think ours are on par.

This is pretty exciting considering that they've been at it for 50 years and in Dubai only 15 years.