Dubai Metro on track to lease all retail units by year-end

Dubai’s transport authority said Tuesday it is on track to lease all vacant retail outlets across Dubai Metro’s Green and Red line stations by the year-end.

As many as 195 units were offered for rent across at stations on both rail lines in October, and the RTA confirmed it was holding talks with a number of retail firms.

“We have a couple of companies interested, but a deal hasn’t been signed yet,” said Adnan Al Hammadi, CEO of Dubai’s Rail Agency. “We expect to have it all rented in a couple of months. Part of it is already rented.

“[Potential retailers] have to be sustainable businesses,” he said. “We are also looking for long term partners, and recognised brands are preferred.”

He declined to specify how many of the metro’s retail units remained vacant and whether rents had been reduced in line with current economic realities.

More than 84 million passengers have used the Dubai Metro since its launch in September 2009, according to RTA figures.

The launch of the Green Line, which added a further 18 stations and 23km to the existing rail network, is expected to drive passenger figures to 100,000 a day, the RTA said.

The launch of the metro’s Red Line in 2009 sparked a bidding war among retailers vying to secure the premium spots. But the difficult economic climate is expected to subdue demand during the second round of leasing.

Al Hammadi said the RTA may look to lift an existing ban on eating and drinking on the trains in a bid to encourage food and beverage sales in the stations and boost their appeal to retailers.

“We want to make sure people can behave properly first, as we want to keep the metro clean and tidy,” he said. “So we are not doing anything [immediately], but maybe in the future.”

The RTA said in September it planned to offer a limited number of metro stations up for company sponsorship, allowing firms to rename the sites.

During the first round of sales, held ahead of the launch of the Dubai Metro in 2009, 11 station names were sold to Dubai firms such as Sharaf DG, Etislat, Nakheel and Noor Islamic Bank.

Etisalat’s deal alone reportedly cost AED135m, helping the RTA to raise nearly AED2bn as it looked to claw back some of the costs of constructing the metro.

The RTA confirmed in 2009 that the cost of building the Metro had nearly doubled from AED15bn to AED28bn.