Jumeirah Beach Residence plans to refashion a number of retail units on its plaza level into office space as dwindling sales leave stores empty, Arabian Business has learned.
Virgin Megastores, which reported a 30 percent spike in UAE sales this summer, said it is reviewing its store in the $1.6bn development and plans to turn it into a discount outlet, and then office space if sales fail to pick up.
“We are going to try one last attempt, which is to turn it into a discount outlet,” said Nisreen Shocair, Middle East president, at the Arabian Business Women’s Forum in Dubai.
“[We may] turn it into an office in about February or March. I know from the JBR management that they are going to be doing more of that, turning the plaza into offices.”
Shocair, an anchor tenant in the retail project, said JBR may fare better with offices rather than retail space, thanks to its central residential location.
“I think is a great idea as it is a great location and the prices are competitive.”
A spokesperson for DPG was not immediately available to comment.
JBR, which spans 36 residential towers able to accommodate 15,000 people, became a popular expatriate destination on its completion in 2007. The project faces 1.7km of beach that features a string of luxury hotels, popular eateries and retail outlets.
But the success of its beach-facing retailers has not translated to those on the development’s plaza level, where a significant number of retail units stand empty.
Low demand prompted US luxury retailer Saks Fifth Avenue to last year replace its store with a discount outlet. The store now sells products from the previous season’s collection, at an up to 60 percent cut.
“It has suffered through lack of footfall, which is probably as a result of the success of ‘The Walk’ and the lack of critical mass for destinations at the upper level,” said Andrew Goodwin, director of real estate consultancy firm DTZ.
It’s the same as anywhere else; schemes evolve from what they were in design to what is most appropriate in practice.”
But Dubai Properties Group, the developer behind the complex, may face stiff competition to attract commercial tenants amid a wider glut of office space across Dubai.
The city has empty office space equal to about nine Empire State buildings, with a further 13.1m sq ft of office space due to be completed this year, Jones Lang LaSalle said in August.
Office vacancies are expected to surpass 50 percent over the next year, the consultancy said.
DPG pledged in May to spend “millions of dirhams” on upgrading facilities at JBR, in the wake of complaints from residents of lax security and badly maintained communal areas.
“We are serious about improvement in all of our projects,” said Khalid Al Malik, group CEO. “The size of the JBR is massive but we are talking about millions of dirhams.”For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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