Rents at Dubai’s major malls surge 25%
Retail rents in Dubai’s major malls have risen by 25 percent in the last year, according to industry sources.
Demand from retailers is outstripping supply, with rents having reached over AED6,000 ($1,633) per square metre, compared to AED4,800 per square metre last year, according to David Macadam, the chief executive of the Middle East Council of Shopping Centres.
“The rates for malls other than super-prime vary from AED1,600 to AED5,000 [per sq metre] depending on the shop, the size and the turnover,” Macadam was quoted as saying by The National newspaper.
“Rent is a function of sales achieved in each store. The more people who come through the doors and the more people who buy, the steeper the rent,” he added.
A recent report by Ventures Middle East predicted that the UAE’s retail sector is expected to grow by over 33 percent by 2015, and is driving growth in other Gulf markets.
Released in conjunction with The Big 5 building and construction exhibition, the report said that UAE growth is attracting investment into other countries in the GCC, including Saudi Arabia, Kuwait and Oman, and to a smaller extent Qatar and Bahrain.
Dubai is the region’s leading retail destination, with the second largest number of global brands after London, according to the report. The Dubai Mall and the Dubai Shopping Festival alone attract close to 35 million visitors per year.
Oman Arab Bank said retail sales in the UAE were expected to grow from its current $65 billion this year to $92 billion in 2017.