After three years of falling house and office prices developers in Dubai are turning their attention to retail as tourism continues to be the driving force behind the Emirate’s economy.
While the price of homes has fallen by more than 65 percent from their peak in 2008, retail sales have been rising since 2009. Retail revenue in the United Arab Emirates increased by around 5.3 percent last year to $31 billion according to the Business Monitor International and will probably increase to $42 billion by 2015. The trend has seen government-owned company Nakheel PJSC, which had to restructure $16 billion of debt last year, expanding its Dragon Mart shopping centre while trying to raise funds for 120 restaurants and 75 stores located on the tip of the Palm Jumeirah artificial island.
Emaar, the owner of the Dubai Mall, the world’s largest rentable space reported that 41 percent of its revenue and 68 percent of pretax profit came from hospitality properties and leased space including shopping malls in the first nine months of 2011. That compares with 24 percent of revenue and 27 percent of profit a year earlier.
Retailers have been flocking to the city, which has seen the opening of stores such as American Eagle Outfitters, Limited Brands, Rivoli Group and the second biggest department store in the US, Macy’s during the last year. Tourism is also up with hotels reporting an 11 percent increase in visitor numbers in 2011, while buyers spent $114 million in the first week of Dubai’s month-long shopping festival – up an incredible 53 percent on the year earlier. Companies such as Union Properties that don’t have assets in the retail sector have been suffering. The firm, which is mainly focused on homes and offices reported a full-year loss of $43 billion and had to hand over ownership of properties to settle $300 million of debt.
According to property broker Jones Lang LaSalle Dubai can expect to see a further 173,000 square metres of retail space added over the next two years. To find out more about property developments in Dubai and the rest of the Gulf head down to MIPIM 2012, 6-9 March at the Palais des Festivals in Cannes, France. If you’re after accommodation then look no further than EAS, your friendly local travel agents. We’ll find you the best hotels and rented apartments right in the heart of Cannes. Or if you prefer, why not try one of our luxury yachts – the choice is yours. Just click on this link to fill in our request form.