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Retail giant may raise some rents despite slowdown
by This email address is being protected from spam bots, you need Javascript enabled to view it on Tuesday, 2 June 2009
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Results 1 to 13 of 13
Posted on Thursday, 4 June 2009
Walk to MOE
Posted by MM at 11:04 UAE time
Take a walk to MOE and you will see that the only shops that are busy are the ones with 60% sale... now if you are going to increase their rents, they might as well shut down and sit home. Rather than making it affordable for the shops in promoting to make them sell for affordable price, MAF thinks they can do the stupidity.
I think any shops that receives rent increase should just walk out in revenge. What makes a mall are the shops, not the mall by itself.
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Posted on Wednesday, 3 June 2009
Greed is alright...
Posted by Sand Jockey at 14:40 UAE time
...and often healthy. It is what helps drive market forces. If MAF believes they can get way with a rent increase then, by all means, let them increase the rents. The market forces will then prevail and they tenants will either leave and open up elsewhere or will continue in their current locations.
Whilst we can lambast MAF all we want it is their decision to raise rents, just as it is the shop owners' decisions to stay or leave.
Now, all that being said, the 2% drop in footfall is a joke. Just go there at almost any time of the day or night and the drop in footfall is noticeable and, as another poster commented, the number of shoppers (those who spent money) is small.
For what it's worth,
SJ
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economic suicide
Posted by paul at 13:49 UAE time
There probably are a few stores in Dubai that are still doing ok and making a profit. This should be good news in the current economic climate. But it seems the greedy mall owners cannot accept that some of their tenants might actually be making some profit while the mall companies themselves are losing money.
So greed kicks in and the malls will milk the few profitable businesses until they too are loss-making.
And once there is not a single profitable company left, they will suddenly find their malls are empty. Business owners want to make a profit, if there is no profit to be made, businesses will leave. If you demonstrate a willingness to squeeze every last drop of profit out of your tenants, you are going to find it very hard to find new suckers to replace them.
Dubai needs to reverse course, make clear it is a competitive business environment that is committed to the long term success of those who invest and wants them to profit. It seems a few greedy operators are pulling Dubai towards the abyss.
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What are the rents in MOE ?
Posted by Retailer in Dubai at 13:27 UAE time
Hi " In the know "
Could you please let us know what retail industry is your friend in. Is he in general raetailing or food retailing or electronics retailing or what ? This is the first time we are hearing a sales rise this year
For All ...
Does anybody know what are the rents per sq ft in MOE ???
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Economics my friends
Posted by In the Know at 12:15 UAE time
I have a friend who owns a shop in MOE. His sales are actually up over last year. Footfall does not equate to an equal sharing of sales across the board.
This same friend has shops in other malls. His MOE location has by far the highest sales and profit of any of his other locations. Even if MAF increased his rent by 30% he would still be making a healthy profit, and his rent would then be on par with what he stupidly agreed to pay Emaar at Dubai Mall. His Dubai Mall outlet is the worst performing unit in Dubai with low sales and negative profit (losing money every month!!!) But for the most part the Dubai Mall rents are higher than MOE (another justification for MOE to increase rents???) but at least MOE has customers.
Retailers in MOE are kind of stuck. Many of them have leases at Deira City Centre and they have signed contracts for Mirdif City Centre. As Mike said there is a lot of "blackmail" going on but when you have so many international brands still buying into the Dubai "dream" (and these days it really is a D-R-E-A-M) and wanting to be in the best locations, the economics of supply and demand will continue in MAF's favor.
The big issue which impacts everyone is the length of the rental agreements. In the West retailers can negotiate rental terms based on 10 or 15 year agreements with options for another 5 years at terms agreed today, not 10 or 15 years from now. Most Middle East leases are 3 to 5 years then retailers wait for the hammer to fall. Years ago I worked for a big Dubai retailer who was renewing a lease at Deira City Centre. The rent increase was 60%! MAF said "pay or leave, others will take the space at an even higher rent". The retailer paid and thanked MAF for ONLY increasing the rent 60%....its a crazy city for sure.
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Highest grossing mall in the world?
Posted by sandi at 11:41 UAE time
You have got to be kidding. This person suffers from delusion of grandeur; he is like the proverbial frog in the well. Gone are the days when sweeping statements peppered with superlatives would do the trick. The interview and is full of generalities and unsubstantiated figures. Total waste of space!
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Such nonesense
Posted by Mike at 10:39 UAE time
To say that the rent in MAF properties is 7-8 percent of the total revenues is such none sense.
Here's what I know from a customer of mine who has a kiosk in Deira City Center. Total sales is at around 40 K per month. The rent is 22 K. That's more than 50%. They decided not to renew their lease for the DCC location. But MAF threatened them that if they do not renew their lease for DCC, they will be forced to move out of the Mall of the Emirates too, where they make a slight profit.
That is black mail.
It's unfortunate. No one is in it here for the long run. Everyone wants to take as much money from as many people as quickly as possible, without any regards for the long term effects.
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2% what ? every one can see the truth man
Posted by hamdan mohamed(hamdan@imail.ae) at 10:24 UAE time
I am one of people who enjoy drinking a cup of coffee at mall of the emirates almost every day since its closer to my house.
i have been discussing this with friends when we set at the mall.
1- there are less people in the mall and for sure its more than 15% percent, and when i say people i mean general public who will come walk around, look at things and leave without buying anything. This is normal since there are no other places to walk around the city with this heat except the mall.
2- the shoppers are less than 50 % i have been watching people who actually buy something, most of the people will be having Carrefour bags. People do need to eat that’s a fact , but do you see any one carrying a bag of LV, DC , Boss, and others anymore ? its seldom , even electronics and mobile phones. people keeping what they got.
3- i used to have hard time parking in the weekend and not any more. people start going other malls or stay at home.
4- why the writer of this article didn’t take few hours of his time to walk by himself on the mall and write what he see instead of telling us what the management of MAF want to tell us ? they could do a press release its much easier.
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MOE Rents
Posted by Jon at 09:41 UAE time
Seems Joe has caught the Dubai disease - Greed.
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Malls
Posted by Henry at 09:00 UAE time
I work in MOE, and to say the foot traffic is 2% down is incorrect.. we all know its down more that 15%... Just trying to justify an upcoming rent increase no doubt
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This is exactly the greed that has hurt Dubai economy
Posted by Doc at 06:31 UAE time
Joe must be the guy that writes the press release for MAF. How can a company be so slefish and not think about the fact that most of the tenants in this mall own multiple shops in almost in all other mall across Dubai and are suffering tremendoulsy from the economic downturn. If what the press release says is true and the stores in Mall of Emirates are making profits, then those stores are the only ones that are enabling the tenants to keep their other stores open in other malls. The prices of goods in Dubai are already higher than the States and Europe mainly due to the high rents. You increase the rents which will increase the price which will then reduce sales which will then force the store to close!!!
If the rents go up in MOE, then the tenants are no longer able to survive and will not only close their stores in MOE but stores in other malls as well. The impact would be enormous. Why does everyone in this country only think about themselves? At the end of the day, the actions of one affects all others. Dubai government should put a freeze on all rent increases in the retail industry for the next 2 years until the economic mess subsides.
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Posted on Tuesday, 2 June 2009
The #1 Shopping Mall commands the high rents
Posted by Joe at 18:52 UAE time
Despite the negative comments from Geriant, I know for a fact that Mall of the Emirates outlets usually have much higher sales than outlets in Dubai Mall, Ibn Battuta, Bur Juman, etc. So if MAF goes to tenants and raises rents by 10% to 20% are tenants going to walk away from their busiest location in Dubai??? No! This is simple economics....Mall of the Emirates is the best retail destination in Dubai. If tenants are not willing to pay the increase there are plenty of companies who would jump at the chance to be in Mall of the Emirates.
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Make my day!
Posted by Geriant at 15:57 UAE time
Bring it on, big talking mall ratfinks. This is hardly the kind of messaging that wins friends and tenants, let alone shoppers to the tasteless expanses of window shopping. Talk to the tenants, none of whom are making a buck. You can drive a Hummer 3 blindfolded through these malls most days, and hit nobody except maybe the cleaner. Yeah, raise the rents, do it! Whoever writes your press releases for you will be job-hunting shortly.
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