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Wed 26 Jun 2019 02:37 PM

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UAE retail rents down by about 30%, says Dubai's 'King of Spice'

Dubai retail tenants are now able to negotiate lower rents, better incentives and longer contracts

UAE retail rents down by about 30%, says Dubai's 'King of Spice'

Retail rates in the United Arab Emirates have dropped by around 30 percent, according to the chairman of Indian retail chain Al Adil Trading.

“Now the market is down so we get very low rents. Almost 30 percent rent is down, so it is good and we negotiate with the landlords to go for longer leases so they give for less,” Dr. Dhananjay Datar told Arabian Business in an interview recently.

“This is a time to expand,” he added.

Al Adil Trading has opened 41 outlets in the Gulf, with plans for six more outlets this year.

The retailer, who specialises in Indian spices and produce, currently operates in the UAE, Bahrain, Oman and Saudi Arabia, and is planning to open in Kuwait in the next six months, with larger plans further afield also in the pipeline.

“We’ll go to Europe… maybe next year,” he said.

According to analysts at consultancy firm Knight Frank, Dubai’s retail market is set to change drastically over the next five year with over 3.7 million square metres of retail space set to be delivered by 2024, a 111 percent increase on current levels.

Similarly, consultancy firm Deloitte said in its 2019 Dubai real estate review that the surge in supply “is expected to put pressure on rents and occupancy levels as landlords continue to offer high incentives including rent free periods, fit out contributions and reductions in service charges”.

While some commentators are saying the Gulf is in a slowdown, Datar remained optimistic. “Some economic researchers are predicting a sluggish growth ahead for the global markets, based on indicators like current trade conflicts between big powers, rising inflation, as well as hike in interest rates. Some are even warning about a slowdown in global economy and a possible recession at the doorstep. To be honest, I can’t speak authoritatively and with full confidence about the future scenario. I am a trader businessman and have learned from the past experiences that there is nothing to worry.

“Markets are always volatile and pass through ups and downs. But it is also true that nothing remains constant. The tutelage of time is that change is the only constant. Personally, I fully believe in that golden truth and try to adjust myself according to the situation. As of now, I don’t see any sluggish trend… Inflation might affect consumer’s decisions to purchase some luxury items temporarily but there is no danger at all to the commodities and FMCG (Fast-Moving Consumer Goods) sectors.”

Read the full interview with Dr Dhananjay Datar here.

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