By Andy Sambidge
Bahrain sees 26.7% fall in year to June due to unrest while UAE, Qatar witness more modest drops
Most of the Middle East is lagging behind a recovery in retail rents across the world, according to a new report published by consultants Cushman & Wakefield.
While more than 80 percent of global retail markets saw a rebound in rents over the past year, prime rents in the Middle East either fell or remained static, the study showed.
The Main Streets Across the World report recorded a 66 percent rise in the number of markets witnessing prime rents increases, compared to the previous year.
The 2011 report said only around one fifth of countries saw rents falling, compared with over one third in 2010.
The report provides a barometer of the global retail market, tracking rents in the top 278 shopping locations across 63 countries.
New York's Fifth Avenue, where rents jumped by 21.6 percent, retained its spot as the most expensive shopping street in the world. Causeway Bay in Hong Kong remained in second place and Tokyo's Ginza in third.
Rental values in the Middle East failed to match the positive trend seen elsewhere, with overall growth stagnating, Cushman & Wakefield said.
Prime rents either fell or remained stable in most cases, with only two countries seeing rises.
The declines were particularly severe in Bahrain (26.7 percent), Syria (16.7 percent) and Jordan (7.7 percent), while the UAE (three percent) and Qatar (2.2 percent) registered more modest falls.
Rental uplift was confined to Lebanon (5.2 percent), where values in the top shopping areas of Beirut proved resilient to external factors.
"The majority of the falls were driven at least in part by the current political situation in a number of countries," the report said.
"The downward pressure on rents also stemmed from an oversupply of retail space, which has had the most significant impact in the secondary markets and within older mall developments."
The best ranked shopping locations in the Middle East was the ABC Centre Achrafieh in Beirut (37th), Raya Mall in Kuwait (44) and City Stars in Cairo (48).
Surprisingly the best ranked shopping location in the UAE, which boasts some of the world's biggest shopping malls, was Abu Dhabi Mall in the capital city.
Michael Atwell, head of Middle East Operations at Cushman & Wakefield said: "Although we have seen marginal falls across the Middle East region in comparison to other global locations, the retail market in the Middle East has continued to perform strongly in prime retail centres.
"The Middle East market has been somewhat masked by the overall instability seen across the region particularly with the unrest and demonstrations in countries such as Egypt, Syria, Libya and Bahrain.
"In addition to the unrest across these countries there has also been a strong increase in supply which has softened the market. However there is now an expectation that the market is recovering well and the prime locations in top performing centres are under strong demand again from retailers who believe in the long term potential of the region."