Average retail rents in Dubai have fallen nearly 40 percent in the past year with vacancies across major malls increasing, Jones Lang Lasalle has said in a report.
It said that average estimated rental values (ERV) declined by about 39 percent to AED209 per sq ft since the second quarter of 2009.
The property consultancy added that ERVs fell by about 10 percent in the last quarter.
In its latest analysis of the Dubai retail market, Jones Lang Lasalle also said average vacancies across regional malls had increased to between 8-10 percent.
It added that expansion plans by retailers were either being “revised downwards or cancelled altogether”.
The report said no new major mall supply was expected to be released until 2013 when the first phase of the Mall of Arabia in Dubailand is scheduled to open.
But it noted that sales revenues are expected to increase by around 3-5 percent this year, following a slump during the global economic downturn.
JLL said the rebound would be primarily driven by retail goods sold in department stores and mid market chains rather than luxury brands.
“Despite the slow growth projected in consumer spending, annual footfall in major super regional malls (such as Dubai Mall) is expected to rise in 2010, owing to tourist attractions and entertainment anchors within malls,” JLL said.
“More enlightened centre managers are proactively engaging with tenants to offer more attractive and flexible terms,” it added.
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