As property prices and rents are on the decline in Dubai, it has become more affordable for retail operators and service providers to expand and open new branches. Commercial rents significantly declined during the past three years due to multiple factors including the spread of eCommerce and growing availability of retail units. At the same time, consumer spending has been subdued due to the effect of low oil prices on UAE’s economy and multiple geopolitical factors. Some retailers have been forced by the circumstances to downsize, or even close doors. These combined factors are making it now possible for new players to enter Dubai’s retail market at lower cost in comparison to a few years back.
Currently, the rate for retail space in shopping malls in primary areas of Dubai starts from 250 Dhs per square foot and can reach up to 1500 Dhs. According to real estate brokers, shopping malls managers are also much more flexible when it comes to accepting longer grace periods for decoration and negotiating service charge reductions. At present, there are multiple locations to choose from, but established and popular areas are naturally prefered. If you are looking to rent retail space in shopping malls in primary areas of Dubai, please contact us here.
Meanwhile, Dubai’s population is constantly increasing and multiple new residential communities are rapidly taking shape across the city. For the typical young and health conscious consumer it is very important to enjoy easy access to pharmacies, laundry shops, mini markets, fitness centers and beauty salons. Often the close proximity of such services and stores dictates tenants’ choice of accommodation in Dubai. It is a matter of convenience all stores to be available under one roof. And as the climate dictates in the Middle East, shopping malls are the most popular and most visited hubs for residents for the variety of shopping and entertainment options on offer.
Shifting focus to the upcoming Expo 2020 Dubai, for multinational retail operators now it makes perfect sense to start preparing shops in order to reap the benefits of the rae commercial opportunity. Dubai is projected to welcome over 25 million tourists in 2020. Many of them are expected to explore the opportunities to relocate permanently either to open businesses, to start new careers or simply to retire here. In addition and ahead of its due dates, Expo 2020 Dubai is also expected to create around 300,000 jobs for people involved mainly in the tourism and retail industry. Consumer spending in Dubai is projected to continue to increase firmly.
When it comes to opening new branches in Dubai, the first choice of retail operators is retail space in shopping malls. Also, fast food and casual dining restaurants owners prefer to establish their businesses in the shopping malls. As the weather in UAE is not suitable for outdoor activities all year long, the shopping mall culture is widespread. People simply are used to spend hours in air conditioned, impeccably clean and secure large malls where every convenience service is available.
*By Gergana Mineva, certified Senior Real Estate Consultant (RERA 31104) specializing in DIFC and Downtown