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Mall space: the property owner’s final frontier

Mall space: the property owner’s final frontier

Are the malls in Dubai Mall being too precious about renting out their much-coveted retail space?

November 16, 2011 4:46 by

Dubai one hit wonder Rohit Iyengar once passionately asked, “How many stores do they have here (Dubai Mall)”? And though a loud and somewhat confused “Over one thousand” came as response, Iyengar need not be so overwhelmed by shopping options at the Dubai Mall—at least not anymore. After all, Emaar’s decision to review the leasing contracts of the not-so hot retail outlets at the mall means that the mall will soon boast of fewer shops.

Mohi-Din BinHendi, the president of BinHendi Enterprises, said: “All the malls, after they open, re-adjust their clients and customers … (the mall) “is filtering out businesses that are not really adding value by their existence in the mall.”


Of course the Dubai Mall shake up isn’t the first dramatic mall review we are to see this year. Earlier this year BurJuman announced similar plans when it asked 100 of the 300+ shops within it to leave. Eisa Ibrahim, the general manager for the mall, had something of a spooky “swimming with the fishes” Mafioso-like tone when he told The National “There are different ways to make it easy for someone to move out or make it difficult for them to stay, there are tactics.”

Now BurJuman, having significantly fallen from its “major mall” status back in the ‘90’s to an unknown pink block in the heart of Karama/Bur Dubai, surely does need a bit of a shake up.


But when it comes to Dubai Mall, we can’t help but wonder if the management is right in issuing a rather threatening warning to those businesses that are willing to put out that much of money to rent out a shop in the world’s largest shopping mall.

After all, do we need bring up the story of Saudi’s Retail Group Gulf which as of late last month closed down more than 40 stores in Dubai, selling of some of its franchises to other retailers. The main complaint? High rents, of course!

Simon Marshall, the chief executive of Fawaz Alhokair (the company that has a majority stake in Retail Group Gulf) told The National: “There’s two sides to Dubai. There’s a side where you have malls that are offering good rental rates but don’t get the footfall to support the model and then you have malls that are getting the footfall but, because of the rates, don’t support the model either. It’s a bit of a lose-lose at this moment in time.”

A rather pertinent statement, one that describes both ends of the retail scene: the Burjumans and the Dubai Malls of Dubai. Now, we aren’t going to suggest that a mall shouldn’t have the ability to determine which retail outlets set up shop in their mall, of course the shops are a main attraction, but consider just how expensive retail space is. According to a Jones Lang LaSalle report retail space in malls go for no less than Dh2,750 per square metre.

Now also consider that Dubai currently holds the record for having the heaviest concentration of shopping centers per capita in the world with a record of 1,385 square meters (the highest in the world).

The emirate is closely followed by the United States of America with 1,028 square meters per 1,000 people – much higher than Europe’s 231 square metres per 1,000 people.

Given that Dubai already has a rather unsustainable oversupply of malls, is shooing away retail outlets from your mall because they aren’t, excuse the term, hot enough, really a wise thing to do? After all, do you know how many malls are there in Dubai? Take it away Rohit!

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