Dubai Mall offers rent reduction to retailers

EXCLUSIVE: Mall store owners get rent relief but sales still said to be disappointing.

Shop owners say rents in The Dubai Mall are coming down, in a sign that the city’s struggling retailers are getting some relief from landlords.

Several stores in Dubai’s largest mall have had their rents reduced by around 15 percent, but retailers complain that sales in Emaar’s flagship shopping centre continue to be slow.

“For tenants who had to renew their contracts this month there was a new price...but some people chose not to renew it,” one shop owner said.

Sales fell between 35-40 percent between December and January and have been unaffected by this year’s shopping festival, the same source, who owns multiple outlets in several different malls, said.

The Dubai Mall will also reportedly cut back opening hours on Monday, when the festival ends, to close at 10pm on weekdays instead of midnight.

Emaar Malls Group was not immediately available for comment.

Gulf retailers are suffering as tourism slows and a wave of layoffs in the real estate and financial sectors prompts consumers to reduce their discretionary spending.

In a recent interview with Arabian Business, the chief executive of Cravia, whose portfolio includes the Cinnabon coffee chain and restaurant Zaatar W Zeit, said rents in The Dubai Mall were “ridiculously expensive”.

“Emaar is charging probably the highest rents in the world and that has to change,” he said.

Mohi-Din Bin Hendi, president of the Bin Hendi retail empire which includes local franchises for Calvin Klein and Hugo Boss, said in December that the group’s 20 outlets at the newly opened mall had underperformed.

“It would be our request to the management to get the shops to open as soon as they can because it is vital for other people's business that all the shops are open at the same time,” he said.

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Posted by: Nicola

In the all Dubai there is no follow up by the management.
Try to having a business become difficult, try to call responsible people which never answer let you think to go find in other country where they answer the phone on the spot and giving you the information without hiding any surprise.
I feel the crisis is around the corner
Good luck Dubai

Posted by: mohamed Mahdi Riad

Went to Dubai Mall management in order to get some info about renting a kiosk in Dubai mall , I was given a mobile number of the lady in charge. Called her several times from different numbers sent her messages during the whole week and she never answered .
What kind of business is this ?! how can i rely on such people whom seem to be totally careless .

Posted by: Mohad

Like i had always said. Dubai had build its tourism through the backs of the fame 'the shopping destination'. Today it has completely ignored and forgotten. In fact, what would attract people to visit is shopping. But for all this to happen again, 'the magic', Dubai needs to understand that rents needs to come down cheaper for commercial and residential. The retailers can compete and offer best prices which would mean Dubai being the best place for shopping. And in turn as I always said, this would mean hotels, restaurants, attraction (such as theme parks), aviation etc etc etc will all get busy again. Everyone will make money and everyone will prosper.

Posted by: Bernard

Why is there no law in Dubai that stipulates that the rent which is due to the landlord is to be multiplied by the % of shops that actually opened their doors? So if 60% is open you only pay 60% of the agreed rent. This way the retailer gets an incentive for opening sooner and the developer in tempted to get more shops open as well. It's both fair and practical it seems to me!

Posted by: Comment

Not suprised either The shame is for those retailers who actually paid in advance for their leases then were advised they no longer could have the site at the rate they paid for and in addition were told the original site was now located for an alternative brand then to add to insult were offered alternative sites at 40% increase in 2nd class locations. ! Says it all really as to why some locations are still not open. Its time landlords took the realistic route and worked together with retailers !

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