Amid signs to the contrary, Dubai developers are still putting their faith in malls to deliver.
Though the city is showing the tell-tale red flags of slowing consumer spending and increasing vacancy rates, developers are ploughing ahead with plans to add about 16 million square feet of retail space in the form of malls and components within mixed-use complexes over the next three years, according to Bloomberg.
But that doesn’t mean Dubai’s developers are building oblivious to reality — they’ve already seen the city flooded with residential and office supply and, according to CBRE, developers know what’s in store next.
“Vacancy is coming,” CBRE’s Middle East managing director Nick Maclean told Bloomberg. “It’s inevitable that failing malls and retail locations will have to be put to other uses.” What will differentiate the fortune of retailers is quality, according to Maclean. Prime locations reputed for their high quality offerings such as Dubai Mall, where the occupancy rate is at 98 percent, will continue to do well.
Last year, CBRE said the United Arab Emirates attracted the most new brands compared to any other country and about half of them were coffee-related or restaurants. [Bloomberg] — Erin Hudson