UAE shop rents climb as retail sales fall

Retailers in the UAE say they are struggling to survive as their rents rise up to 20 per cent, at a time when residential rates are decreasing and shoppers are staying at home.

Duncan McLellan, the general manager of Dubai Holding Group, which holds the local franchise for brands such as Zara, said turnover has fallen by as much as 35 per cent but mall rents, a retailer’s biggest expense, have risen between 5 per cent and 20 per cent upon renewal.

“We’re seeing quite significant decreases in our sales,” Mr McLellan said. “While everybody is trying to be more tight on their budgets, their staffing, salary increases – all of these areas which you can control – the one area you can’t control is your rent.”
A survey by the property consultancy CB Richard Ellis (CBRE) this month showed that retail rents in the first quarter fell in Dubai and Abu Dhabi for the first time in at least 10 years.