Dubai malls resort to lease buybacks | GulfNews.com

• Image Credit: Arshad Ali/Gulf News Archives
• Mall owners in Dubai are using innovative leasing practices following the robust performance by the retail sector, where growth rates for key categories are averaging 20 per cent year-on-year. Dubai’s leading malls can demand a premium on their new leases.

Mall managements at some of Dubai’s more popular shopping destinations are “buying back” leases from under-performing retailers to accommodate those on their waiting lists. In some instances, these waiting lists number well over 100 hopefuls and who are willing to pay a considerable mark-up to get into a mall of their preferred choice.
“Essentially, the mall owners will pay existing retailers to leave the spaces vacant to enable the new brands to set up business,” said David Macadam, regional director — head of retail at the property firm Jones Lang LaSalle (JLL). “This buy-out is a good solution for both the departing retailer — seeking to recoup the losses incurred in the poor performing shops — and the developer, who gains new brands for the centre.”
Such innovative leasing practices come in the wake of the robust performance by Dubai’s retail sector, where growth rates for key categories are averaging 20 per cent year-on-year. In such an environment, Dubai’s leading malls can demand — and get — a premium on their new leases.

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