Retail rents in Dubai fall 10% in Q1 - report

Rents for retailers in Dubai fell 10 percent in the first quarter of the year, research firm CB Richard Ellis (CBRE) said on Tuesday.

The CBRE EU-27 Retail Rent index, which includes Dubai, saw a decrease of 3.0 percent during the first quarter and a decline of 1.2 percent on the year.

Prime rents fell by over 10 percent in several markets in the quarter, including Athens, Dubai, Barcelona and Dublin.

“Retail is driven by consumers, and consumers are driven by sentiment. In most regions, the economic slowdown is now being reflected in rising unemployment, weakening income growth prospects and, in many countries, falling house prices,” CBRE said in the report.

Despite government measures to boost spending, consumers are battening down the hatches. Amid high levels of personal debt, many are choosing to save or pay down debt, rather than to spend.

“In some markets, retailers are…known to be negotiating with landlords to secure rent discounts or more favourable lease terms in exchange for agreeing to extend their leases,” CBRE said.

Dubai retailers have called for lower rents amid sliding consumer confidence, a drop in tourism and the opening of new malls such as Emaar’s The Dubai Mall, which bills itself as the largest mall in the world.

Majid Al Futtaim, the largest developer of shopping malls in the Middle East, has said it may raise rents for some of its tenants this year despite a drop in consumer confidence across the region, as contracts typically run over a number of years.

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