By Neil Halligan
Retail rents are set to rise by 10% this year, slowing to 5% in 2015
Dubai will see as many as 20 community shopping malls being built over the next five years, as part of a drive for more community-focused outlets, according to a leading retail analyst.
The Future Retail Summit in Dubai’s The Address Dubai Marina heard that increasing demand among the city’s outer-lying communities has led to a significant increase in the number of smaller, community-based malls, with the latest one opened by Nakheel at Jumeirah Park Pavilion earlier this month.
Humaid Zayed Alnuaimi, head of leasing, Nakheel Malls, one of the speakers in a discussion about zones, trends and retail destinations, told Arabian Business that the average community mall is 80,000 square feet in size, with 25,000 sq ft reserved for the supermarket anchor tenant. The malls will also have 20 to 30 units, which will have an average size 1,000 sq ft.
Alnuaimi, speaking on the sidelines of the retail event, said the smaller malls offer community-driven retail offerings, something different from the large-scale ones currently in place.
“What’s important about the community mall is that it provides the community with convenience. It adds value to the community. At the same time, it’s a gathering place,” he said.
“Each community requires different kind of retail choices. Each mall is tailor-made for the community,” he added.
Alnuaimi said he expects 20 more community malls to open in Dubai over the next five years, with the area surrounding the Dubai 2020 site and Jebel Ali to see up to seven new malls.
“That side alone is going to have around five, six or seven community malls.
“Two are going to be in Al Furjan, a couple of others are going to be towards Palm Jebel Ali, and other developers are going to build a couple of other malls,” he added.
The demand from tenants for the malls is extremely strong, from both anchor and smaller tenants.
“We feel that we don’t have enough. The community malls get filled within one week. As soon as we launch a community mall, the supermarkets are there. We offer it to all of them and then one of them is selected. Then the other retailers, within a week or two, take the rest,” said Alnuaimi.
He said the rents, while not as high at the larger malls, are charged based on value of the area.
“The rent is determined by the traffic that is expected to that community mall,” he said.
Alnuaimi said rent in malls in general has increased by ten percent since the beginning of this year, but he expects the increases to slow to five percent after 2015.