Mall rents in the Emirates climbing ever higher

Average rents in Dubai stood at US$114 per square foot per annum. Above, Dubai Mall. Jaime Puebla / The National

Shopping centre rents are on the rise in the UAE, but both Dubai and Abu Dhabi remain competitive markets for international retailers, according to CBRE.
Average rents in Dubai stood at US$114 per square foot per annum and at US$71 per sq ft per annum in Abu Dhabi during the second quarter, according to the world's largest commercial property services firm's latest quarterly ranking.
The UAE does not even come close to the top 10, which is led by Hong Kong, New York, Paris, London and Sydney. But that is no refection on how the market is performing locally, according to Matthew Green, the head of research and consultancy for the UAE at CBRE Middle East.
"In London the prime rent would be the zone A rent. That's not done here. We have an overall rent. Our prime here is Mall of the Emirates or the prime shopping centres and the rents just don't compare," he said.
The UAE languishes in around 70th place on the list, he added.
"It is as much a factor of how the rents are calculated here and not so much a reflection of how the market is performing," said Mr Green.
"But if you are a retailer and you have the opportunity to go in to a market with fantastic potential to [reach] consumers who love to spend, a really strong tourism market and great affiliation with luxury brands and can also be there for a cheaper rent, I guess that's why Dubai is the second most branded location globally at this point behind London."
Rents are rising in Dubai, particularly in the prime malls, which are all at about 98 to 100 per cent occupancy with waiting lists.
Abu Dhabi, where a significant amount of new mall space is coming on stream, is a different story.
"You have Yas Mall coming in next year and that's a huge amount of space.
"When you have that difference in availability you are going to struggle to see the same levels of rent in Dubai, which is a slightly more mature market and there isn't so much availability of space," said Mr Green.
During the second quarter in Hong Kong, average rents stood at $4,328 per sq ft per annum; $3,050 in New York; $1,220 in Paris; $1,156 in London and $945 in Sydney.
[e-mail]