By Andy Sambidge
CB Richard Ellis report says rents fell the most in EMEA region with 16% decline in Q4 alone.
Dubai's retail sector saw average rents plummeting 50 percent in 2009 amid the impact of the global crisis, according to a new report by CB Richard Ellis.
The property research firm's latest analysis of rents and yields in the European, Middle East and African (EMEA) also showed that the emirate's rents fell by 16 percent in the fourth quarter alone.
Average rents in Dubai dropped to $744.50 per square metre per year, CB Richard Ellis said, 50 percent down from peaks of late 2008.
The drop will come as relief to many retail tenants in the city who last year told Arabian Business that they were struggling to pay high rents as sales fell in the worldwide downturn.
Bucharest in Romania saw the second biggest drop in retail rents (43 percent) while Manchester in the UK, which boasts the Trafford Centre, was third with a fall of 31 percent.
Dubai rental values also fell sharply in the office and industrial sectors, the report added.
CB Richard Ellis said office rents in Dubai fell more than 27 percent in 2009 to an average of $1,189 per sq m per year. However the research also showed that rents had stabilised in Q4, showing zero change from the previous quarter.
The biggest office rent fall in the EMEA region was seen in Moscow where rents dropped by 43 percent.
In the industrial rents sector, Dubai was again the biggest faller in 2009 in the region, with average declines of 33 percent to an average rent of $89 per sq m per year.
A report last month by Business Monitor International predicted strong growth for the UAE's retail sector.
It said sales are predicted to hit $142.59bn by 2013, a 26 percent rise on figures for 2008.
BMI said GDP per capita in the UAE was forecast to rise by almost 17 percent by the end of the forecast period, reaching $60,753.
Good news as a consumer, but not until retailers start passing that savings over the retail price.
Thats good to know but hopefully the monopolistic market in uae takes a hint and the realtors reduce the rents on long term contracts so retailers can get breathing room and pass on the savings to customers as MM hopes
Sorry, but the successful malls like Mall of the Emirates and Deira City Centre have NOT decreased rent. Why do you think there are shops still not open in Dubai Mall? Because they have NOT decreased rent and with the economic downturn not everyone is going to continue to overpay for spaces in malls that do not have customers
It seems the current economic climate is a last minute bid to cash in on maximising profits by the retailers. Industry heads are refusing to adopt a long term sustainable business model and are still resorting to quick get-rich initiatives with no consideration to customer retention or customer engagement initiatives. Matter of time before the retail arena matures and the fit survive. Fit with regard to business acumen and long terms strategic growth and NOT short terms initiatives. Amen to the rest...
We have three stores in three of the major dubai shopping malls. We have not received any reduction so far, to the contrary, landlords are still increasing in one way or another.