By Gavin Gibbon
Mohamed Alabbar said Dubai Mall is currently welcoming 100,000 visitors daily
Emaar Properties chairman Mohamed Alabbar has revealed rent discounts to retailers operating in the company’s shopping malls will continue for as long as it takes for the industry to recover.
Speaking at the AI Everything conference in Dubai World Trade Centre, Alabbar admitted the relief measures had caused a “big hit” on the company’s cash flow.
These include waivers granted based on rent, service charges, annual marketing fees and a 70 percent flat discount on chilled water charge limited to the lockdown period.
Alabbar said: “We are working with the retailers now to say, we will take just a percentage of your rent, as the market improves. On good days you’ll make money, bad days we’ll carry eachother.
“I would say if you run a good, successful mall, you’ll still be ok, but you work with them (retailers) and the percentages work that when life’s going back, rent will go back to that level anyway. They do well, we’ll do well. Will that take six months, will it take nine months or four months? We’ll ride it together.”
Alabbar revealed that the company’s flagship Dubai Mall is welcoming around 100,000 visitors daily, as the emirate gradually recovers from the enforced Covid-19 lockdowns - the pre-Covid number was in the region of a-quarter-of-a-million daily visitors.
While the economic impact has been felt across all sectors, Alabbar said that Emaar “got lucky”, by planning for a potential dip in the market some 18 months ago.
He explained: “I said, this Christmas is not going to last. So I went with my team and we rebuilt our balance sheet, we revisited our talent, we revisited our debt levels, all of that, we cancelled some stuff, knowing that this Christmas in the world had gone too far.”
He added: “If you ask me today, we’re not doing much about debt, we’re not doing much about cash, because this is all in a good place, but at the same time we were affected because we have a big malls business where you tell your retailers, ‘I’m not going to take rent from you, I’m only going to take a percentage of rent’. That’s a big hit on your cash flow.”
In terms of other areas of the business, Alabbar revealed that collections from the real estate sector are also picking up, from stock sold over the last three years.
He said: “On the real estate side, of all the stock we have sold, we have a backlog of around AED50 billion. We’re really impressed that the collection now is almost 95 percent of pre-Covid, which is a big number for us on a weekly basis.
“That’s an indication of how confident customers are.”