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.