UAE’s Emaar Malls, which operates the world’s largest shopping centre, Dubai Mall, delivered better than projected profits for the first half of 2021, as the retail sector moved towards recovery.
Net profit for January to June 2021 reached 622 million dirhams ($169 million), registering an 80 percent increase from 345 million dirhams in the same period last year. Revenue also hit 2.048 billion dirhams, up by 23 percent compared to 1.660 billion in 2020.
In a statement to the Dubai Financial Market (DFM), Emaar Malls said the second quarter of 2021 continued to show a “steady recovery from the pandemic’s impact on the global retail market.” This has been largely fuelled by increased visitor spends.
The UAE’s retail sector, which is heavily dependent on international tourists, has been among the worst affected by the tight mobility restrictions and lockdowns imposed last year. Shops across the UAE saw footfalls plummeted after the lockdown was lifted and shops returned to business, as several borders around the world remained shut.
In its June 2021 report, Mashreq said the sector did start to recover after restrictions around the country eased and visitor arrivals returned. Massive vaccination drives also gave a much-needed lift to consumer sentiments.
“As vaccination programmes take effect, the region’s retailers are finding their footing again in 2021, supported by a recovery in domestic spending and the return of tourists between November-February,” the bank said.
Retail space, tenants
Despite the challenging times, many retailers also stayed in business. According to Emaar Malls, occupancy levels across its assets – the Dubai Mall, Dubai Marina Mall, Gold & Diamond Park, Souk Al Bahar and the Community Retail Centres – were at 91 percent throughout the second quarter of the year.
Online consumer spending was also high, with Emaar’s e-commerce fashion and lifestyle business, Namshi, posting sales worth $116 million for the second quarter, up by 65 percent compared to the previous quarter. The platform’s online sales reached $186 million during the same period.
At the same time, Emaar Malls’ tenants have “significantly recovered”, with overall sales in the second quarter growing by 8 percent compared to the first quarter, and 77 percent compared to the first half of 2020.
“The strong recovery in tenant sales was driven by an increase in average spend per visitor by 59 percent during H1 2021 compared to the same period of 2020, and an increase of 62 percent compared to H1 2019,” Emaar said.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
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© ZAWYA 2021