Abu Dhabi retail market is facing challenges, indicates JLL


April 16, 2019 | By RetailME Bureau

The performance of Abu Dhabi’s real estate market remained subdued in Q1 2019, indicates research firm JLL. The retail market continued to face challenges from a slowdown in retail spending and the rise of e-commerce. This saw many mall operators offer extensive leasing incentives to attract and retain retailers.

No major retail completions took place during the first quarter of 2019, leaving the total retail stock unchanged at 29 million sqft GLA. Supply is expected to increase significantly with approximately 2.2 million sqft of retail GLA scheduled to be delivered by the end of 2019. The key anticipated delivery in 2019 is that of Al Maryah Central on Al Maryah Island. The remainder of upcoming stock is made up of retail shops within mixed-use developments.

An additional 2.4 million sqft of GLA is expected to handover in 2020, increasing the total supply of retail space in the capital to just over 32.2 million sqft. As with all sectors of the market, JLL remains cautious of the delivery of these projects and can expect delays as mall owners take time to strategise and reposition their assets in order to stand out against subdued market conditions.

Despite the limited amount of retail space entering the market in Q1 2019, retail rents continued to decline as vacancy rates increased. Average retail rents across all mall types registered drops of 5% year-on-year (y-o-y). Meanwhile vacancy rates increased y-o-y to register 22%. As a result, and in line with trends elsewhere in the UAE, retail mall owners are becoming more flexible and are offering a wider range of incentives to attract new tenants and retain existing ones.

Despite these efforts however, vacancy rates continue to increase in many malls, particularly the lesser performing, lower quality retail centres. This pressure is also mounting from the growth of e-commerce, which poses a threat to traditional and less diversified malls. Consequently, the government launched Retail Abu Dhabi (RAD), an annual event set to drive demand and increase footfall across malls. As part of this initiative, several malls offered significant discounts and promotions in Q1 2019.

Previous Article Next Article

SHARE

YOU MAY ALSO LIKE /


Dr. Dhananjay Datar Chairman & Managing Director ADIL Trading Co. LLC

Dr. Dhananjay Datar Chairman & Managing Director ADIL Trading Co. LLC holds 

Continue Reading

February 29, 2024 | By Rupkatha B
Hani Weiss, Chief Executive Officer, Majid Al Futtaim Retail

In 1995 regional retail conglomerate Majid Al Futtaim introduced Carrefour to the 

Continue Reading

February 26, 2024 | By RetailME Bureau
Prashant Parameswaran, Managing Director and Chief Executive Officer of Tata Consumer Soulfull

Tata Soulfull, a leading name in the ‘good-for-you’ snacks and breakfast cereals 

Continue Reading

February 22, 2024 | By Rupkatha B
Jean-Luc Graziato, Chief Commercial Officer of Majid Al Futtaim – Retail and Alia Al Harmoodi, Acting CEO of the Environment, Health and Safety Agency

Majid Al Futtaim – Retail, which holds the exclusive franchise to operate 

Continue Reading

February 20, 2024 | By RetailME Bureau
Krishna Dhanak, Managing Director, Alpen Capital

In an exclusive interview Krishna Dhanak, Managing Director, Alpen Capital shared insights 

Continue Reading

February 19, 2024 | By Rupkatha B
Majed M. Al-Tahan, Co-founder & Managing Director, Danube Online

As digital transformation across the retail industry continues to accelerate, the expectations 

Continue Reading

December 19, 2023 | By RetailME Bureau
Frederic Levy-Perrault, CEO, Al Raya Supermarket

Saudi Arabia-based grocery retail chain Al Raya Supermarket serves over 100,000 customers 

Continue Reading

December 15, 2023 | By RetailME Bureau
Ahmad AR. BinDawood, Chief Executive Officer, BinDawood Holding

BinDawood Holding has a rich Saudi heritage, spanning over 50 years, 38 

Continue Reading

December 13, 2023 | By RetailME Bureau
Majid Al Futtaim Retail commits to Collaborative Impact Goals at COP28

Majid Al Futtaim Retail, which owns the exclusive rights to operate Carrefour 

Continue Reading

December 8, 2023 | By Rupkatha B
BinDawood Holding Company earns Honorary Shield for Compliance Excellence

BinDawood Holding Company has earned an Honorary Shield, a distinguished recognition by 

Continue Reading

December 6, 2023 | By RetailME Bureau
First Movers Coalition for Food to create up to $20-bn value chain for sustainable farming

The World Economic Forum, with support from the Government of the United 

Continue Reading

December 5, 2023 | By RetailME Bureau
Food consumption in the GCC to grow at a steady pace

Food consumption in the GCC is set to grow at a CAGR 

Continue Reading

November 29, 2023 | By RetailME Bureau




Download Images RetailME Magazine