BCG warns GCC malls: 25% of revenue already comes from non-GLA sources

Boston Consulting Group is warning GCC retail developers and mall operators about a simple, uncomfortable truth: the money is moving. In its report Imagining the Future of Retail: Beyond Space, BCG says up to 25% of revenue at leading retail assets already comes from non-GLA sources. That is a big deal for a sector still built around floorplates, leasing, and occupancy-led performance metrics.

BCG links this revenue shift to a broader reset in consumer behavior driven by AI and e-commerce. More than half of consumers under the age of 34 already use AI tools as part of their shopping journeys, according to the report. BCG says this could change how customers discover products, interact with brands, and make purchasing decisions, and it raises a more disruptive possibility: AI agents becoming primary decision-makers in those journeys, reducing the influence of traditional retailer and brand relationships.

Now zoom out to why this matters for GCC malls specifically. The region’s retail real estate sector is undergoing what BCG describes as its most ambitious physical expansion in generations. Millions of square metres of gross leasable area (GLA) are under development across major projects in Riyadh, Jeddah, Dubai, and Doha. But BCG also flags that luxury retail space expansion in several GCC markets has already outpaced growth in addressable consumer spending. Translation: when demand does not keep pace with supply, the traditional mall model faces pressure on sales per square metre, and developers have to rethink development strategies rather than just add more retail space.

And supply pressure is not theoretical. Competition is increasing as new retail supply continues to enter the market. When more shopping options arrive, customers do not just pick by location. They pick by relevance, speed, and the experience around discovery and purchase. BCG’s report argues that future success will depend less on physical space and more on data, digital capabilities, customer experiences, and new revenue streams. In other words, the mall becomes less like a building and more like a platform that orchestrates customer journeys.

BCG frames this as a change in operating model, not just a change in marketing. The report notes that many organizations remain tied to traditional leasing models, siloed functions, and occupancy-led performance metrics. It warns that without investment in analytics, customer experience design, and agile decision-making capabilities, progress may remain uneven. That is the board-level issue hidden under the architectural one. If performance dashboards still reward occupancy, teams will keep optimizing for square metres even as customer journeys shift toward AI-assisted discovery, digital interactions, and non-GLA monetization.

The report also describes how generative AI and agentic tools could reshape relationships between consumers, brands, and retailers. It outlines three scenarios for retail real estate leaders to consider, and it says this could challenge the economics of traditional mall development as seen in some advanced markets. In one scenario, value would increasingly flow to operators capable of capturing and monetising customer intelligence. If that scenario lands, the operator that treats data as a cost center loses; the operator that treats it like a revenue engine wins.

BCG identifies three archetypes emerging within GCC retail real estate. Andy Veitch, Managing Director and Partner and Head of Consumer Practice at BCG Middle East, says the sector has an opportunity to redefine its future, adding that there is an immediate opportunity to shape the next chapter of GCC retail real estate by innovating for future retail needs rather than continuing with the traditional development model. He argues that those who act decisively by choosing a clear archetype, investing selectively in enabling capabilities, and shifting from space delivery to business model innovation will define the category for the next generation.

What should peers do with all of this? The strategic stakes are straightforward. GCC malls are being built in physical scale at the same time that consumer decision-making is being rewired by AI tools and e-commerce behavior. If a significant share of revenue is already coming from non-GLA sources, and if more consumers are using AI tools during the shopping journey, then digital and data capabilities stop being “nice to have.” They become core to relevance, pricing power, and the ability to monetize customer intelligence. For executive teams and boards, the question is no longer whether retail has to change. It is whether they will modernize fast enough to match the pace of disruption, before the economics of their space-centric model get squeezed.