Monday, Sep 10, 2012
Dubai: Abu Dhabi’s mall rentals are starting to inch up again after remaining steady for the better part of the last 12 to 18 months. The hikes — by between 10 to 25 per cent — are apparent on some of the recent lease renewals as well as for new stores opening as part of some of the malls’ expansion programmes.
While Dubai’s leading malls have already gone through the process at the start of the year, it is now Abu Dhabi’s turn.
Industry sources affirm that a firming up of rentals is valid. “Rental rates — across residential and commercial property — are determined by the prevailing business environment and investor confidence,” said Robert Tannoury, property director at the sprawling Dalma Mall.
“Over the past year, the UAE has recorded solid growth across all its key sectors including retail and in this environment of growth it is only natural that prices tend to be on the higher side...especially if the demand is not matched by supply.”
According to the property consultancy Jones Lang LaSalle’s estimates, the leading malls within Abu Dhabi city command anywhere from Dh2,000 to Dh4,000 a square metre annually, while off-island locations average between Dh1,800 to Dh3,000 a square metre.
Lease rates
Then there is the Aldar owned Yas Mall, a $2 billion super-regional leisure and entertainment destination in the making and all set to open late next year. New retailers are being regularly added to the roster to take up space across the 235,000 square metres on offer.
Given its scale and prestige, “Yas Mall’s reported average lease rate ranges between Dh4,000 to Dh4,500 square metres per year,” said David Macadam, regional director and head of retail at JLLS.
While Yas Mall sets up a marker at the top end of the retail spectrum, some of Abu Dhabi’s existing malls are now looking to bridge the gap. For sure, they are helped by the strong bounce in retail sales experienced by retailers in Abu Dhabi. Dalma Mall, for instance, recorded its highest visitor traffic over the past two months during Eid. Other mall owners echo the sentiments about a general all-round improvement in the emirate’s retail environment. Given that, it is only natural that rentals should be in sync.
“Yes, rentals in Abu Dhabi are firming up with almost all the new malls doing good and still attracting new brands,” said Raja Abdul Khader, director at Line Investments ad which manages multiple malls in the city. “For the Al Wahda Mall extension, the response has been encouraging from both existing brands as well as first timers to Abu Dhabi.
“The rentals are definitely based on the offerings, locations and catchment areas at selected malls.”
A strong fourth quarter performance and the prospects are that the new year could yet see another round of rate hikes.
By Manoj Nair: ?Associate Editor
Gulf News 2012. All rights reserved.
