The Rise of Mixed-Use Developments: Why Leisure Anchors Matter More Than Retail
Across the Middle East and MENA, mixed-use developments are entering a new phase of maturity. For the past two decades, retail has been the commercial backbone of destination development. Leasing strategies, investment models, and even design decisions were built around the assumption that retail would drive footfall, and everything else would follow.
That assumption is now being challenged!
Retail is no longer the primary reason people visit destinations. And as a result, it can’t be the foundation on which these destinations are built.
From retail-led to experience-led economics
The shift we are seeing is not just behavioural, it is also economic. Covid and the rise of e-commerce have fundamentally eroded the role of physical retail in driving frequency. Consumers no longer need to visit a destination to access products, compare prices, or discover brands.
What physical destinations must now deliver is time well spent. This is where mixed-use development strategy is being redefined. The commercial model is moving away from “how do we drive footfall?” towards “how do we drive dwell time, repeat visitation, and cross-spend?”
Experience-led destinations are better positioned to do all three.
Leisure, entertainment, and culture are not competing with retail, they’re compensating for what retail alone can no longer deliver, this is caveated slightly as there are some great brands leading the way on experiential F&B and retail, Lego and Nike being great examples of rolling out experiential stores, but unfortunately they are too few at the present.
Leisure anchors as primary demand drivers
In this new era, leisure anchors are not supporting elements; they are demand generators. For example, I was recently party to a survey where 98% of the consumer base iterated that they chose a Mall visit due to its L&E offer. To this end thankfully I am seeing developers increasingly treating attractions, LBE concepts, and immersive experiences as the starting point of the masterplan, not the final addition.
The reason is strategic:
Leisure creates intentional visits, not incidental ones
It attracts broader demographics, including families and tourists
It increases length of stay, which directly impacts F&B and retail performance
It provides differentiation in an increasingly competitive market
The key shift is this: footfall is no longer enough. The quality of that footfall, how long it stays, and how it moves through the destination is what drives value and leisure anchors shape all three.
Dwell time is the new commercial metric
One of the most important changes in mixed-use performance is the growing importance of dwell time as a KPI.
Traditional retail models focused heavily on conversion and sales per square metre. While still relevant, these metrics are no longer sufficient in isolation.
Destinations that succeed today are those that extend the customer journey. Leisure plays a critical role here. A two-hour entertainment experience fundamentally changes how a visitor interacts with a destination compared to a 30-minute retail visit.
This has a multiplier effect:
Increased F&B spend
Higher likelihood of unplanned retail purchases
Greater engagement with surrounding offers
Stronger emotional connection to the destination
From a commercial perspective, dwell time is not just an operational metric. It is a revenue strategy.
Entertainment as a strategic placemaking tool
Placemaking is often discussed in design terms, but in reality, it is a commercial discipline. The most successful destinations in the region use entertainment not just to fill space, but to define identity.
This is particularly important in the Middle East, where scale and quality benchmarks are as we know, exceptionally high. Simply delivering a “good” retail environment is no longer enough to stand out. Entertainment creates narrative. It gives people a reason to talk about a destination, to recommend it, and to return.
This is where placemaking through leisure entertainment becomes a competitive advantage.
However, not all entertainment delivers this value. Generic, poorly differentiated concepts rarely create lasting impact. Strategic alignment between concept, audience, and location is critical.
The integration challenge: LBE, retail and hospitality
One of the most common pitfalls in mixed-use development is treating leisure as an isolated component.
Adding an attraction to a scheme doesn’t automatically improve performance. In some cases, it can even create friction if not properly integrated. The real value comes from how leisure is connected to the wider ecosystem.
From a strategic perspective, this means:
Designing circulation so that leisure naturally feeds retail and F&B
Aligning target audiences across different components
Programming spaces to encourage movement throughout the day and evening
Ensuring adjacencies support commercial outcomes, not just operational convenience
Location-based entertainment is most effective when it is part of a broader journey and not a standalone destination within a destination. But this level of integration requires early-stage planning, not late-stage adjustment.
Rebalancing the development model
What we are ultimately seeing is a rebalancing of priorities. Retail is not disappearing, but its role is shifting from anchor to complement. Leisure, entertainment, and hospitality are becoming the primary drivers of engagement, while retail benefits from the ecosystem created around them.
This has implications beyond design:
Leasing strategies need to evolve to reflect new traffic patterns
Investment models must account for longer payback periods associated with experiential assets
Partnerships with operators become more critical in delivering quality and consistency
Asset managers need to think beyond rent per square metre and focus on total destination performance
Developers who continue to prioritise retail as the core driver risk building destinations that struggle to remain relevant.
The future of mixed-use in the Middle East is not about replacing retail. It is about redefining its role within a broader, experience-led ecosystem. Leisure anchors are not just enhancing destinations. They are restructuring how they work commercially.
For developers and operators navigating this shift, the challenge is not just understanding the trend, but translating it into commercially viable strategy. From defining the right leisure mix to structuring partnerships and ensuring integration across retail and hospitality, these decisions shape long-term performance. This is where strategic advisory becomes critical. Supporting destinations across the Middle East and MENA, I work at the intersection of concept, commercial model, and market insight, helping ensure that experience-led developments are not only compelling, but sustainable and aligned with how the market is evolving.