JLL evaluates Brexit impact on Dubai’s retail real estate


July 18, 2016 | By RetailME Bureau

Brexit increases uncertainty but it is unlikely to have significant long-term impact on Dubai real estate market, states JLL in its Q2 2016 Dubai Real Estate Overview report that evaluates the impact of Britain’s exit from the European Union on the Dubai real estate market across retail, hotel, office and residential sectors.

“Dubai caters to the most open real estate market within the region and as a result is more susceptible to external factors, which is why the Brexit decision has seen an adverse effect on retail,” believes Craig Plumb, head of research, JLL MENA.

Commercial investors and occupiers are impacted by sentiment and confidence, but their attitude towards real estate in the MENA region is more likely to be driven by their own business and financial situation. Those companies whose business could be negatively impacted by Brexit could delay real estate commitments.

Further, the performance of retailers is largely correlated to the spending patterns of tourists coming into Dubai. With the devaluation of the British Pound, Dubai and the MENA region as a whole has become a more expensive destination. Therefore, a further decline in European visitors is expected in the foreseeable future.

Meanwhile, the retail real estate market saw an addition of 322,917 sqft of GLA through three new shopping malls including a Community Centre in International City, Ibn Battuta Mall Phase II and The Ribbon in Motor City. The remainder of 2016 is expected to witness the delivery of further 1.6 million sqft.

“Our supply pipeline for 2017 has been increased with construction having resumed on two projects, the Dubai Art Centre in Barsha and Sustainable City Mall, which increases the 2017 supply to 159,000 sqm,” Plumb adds. “The retail market is currently situated at the top of the real estate cycle, suggesting that we expect rents to continue dropping for the remainder of 2016.”

In addition, the reality of Value Added Tax (VAT) being introduced in 2018 is setting a worrisome tone across the market. It will lead to higher inflation rates and reduce discretionary spending. Although food and other necessity goods may be exempted, this is likely to impact the ‘luxury’ sector as consumers become more cautious over their spending patterns.

While negative for the retail sector, this new tax will be positive for the overall economy, marking a further diversification of government revenue away from the oil sector. Another positive of the VAT will be greater transparency and the ability for mall owners to have greater visibility of sales patterns.

Comments

comments

Previous Article Next Article


TRENDS


The role of stores during the holiday season

The role of stores during the holiday season

What will be the role of stores during the holiday season in 

Continue Reading

September 21, 2020 | By RetailME Bureau
Converting mobile browsers into buyers

Converting mobile browsers into buyers

Converting mobile browsers into buyers is the task at hand, states Kalika 

Continue Reading

September 21, 2020 | By RetailME Bureau


MOST POPULAR


ASOS launches its first circular fashion collection

ASOS launches its first circular fashion collection

British online fashion & lifestyle retailer, ASOS launches its first circular fashion 

Continue Reading

September 30, 2020 | By RetailME Bureau
Marks & Spencer brings back Shwopping recycling programme

Marks & Spencer brings back Shwopping recycling programme

British retailer Marks & Spencer (M&S) brings back Shwopping recycling programme in 

Continue Reading

September 28, 2020 | By RetailME Bureau




YOU MAY ALSO LIKE /


Eagle Hills Sharjah signs up Every Day Fresh Hypermarket

Eagle Hills Sharjah signs up Every Day Fresh Hypermarket to meet the 

Continue Reading

September 14, 2020 | By RetailME Bureau
BinDawood Holding reportedly sets IPO price

Saudi Arabia-based grocery retailer BinDawood Holding reportedly sets IPO price, indicates Reuters. 

Continue Reading

September 13, 2020 | By RetailME Bureau
Choithrams continues supporting UN WFP’s Zero Hunger campaign

For the sixth consecutive year, UAE-based supermarket chain Choithrams continues supporting UN 

Continue Reading

September 9, 2020 | By RetailME Bureau
BRW Society products will soon be available at Spinneys

Having been inducted into the Spinneys incubator programme, home-grown, online tea brand 

Continue Reading

September 8, 2020 | By Rupkatha Bhowmick
Urban Foods is on an expansion spreeUrban Foods is on an expansion spree

UAE-based Urban Foods, a strategic partnership between Meraas and Dubai Holding, is on 

Continue Reading

September 7, 2020 | By Rupkatha Bhowmick
Carrefour launches click & collect self-service at DIFC

Operated in the UAE by Majid Al Futtaim, Carrefour launches click & 

Continue Reading

September 7, 2020 | By RetailME Bureau
Tesco strengthens commitment to create employment opportunities

British grocery retail chain Tesco strengthens commitment to create employment opportunities through 

Continue Reading

September 7, 2020 | By RetailME Bureau
Waitrose & Partners UAE opens a convenience store in Al Barari

Waitrose & Partners UAE opens a convenience store in Al Barari, Dubai. 

Continue Reading

September 6, 2020 | By RetailME Bureau
Amazon-owned Whole Foods Market launched online-only store

Amazon-owned Whole Foods Market launches online-only store in Brooklyn, New York. This 

Continue Reading

September 3, 2020 | By RetailME Bureau
Interior of Grandiose Dubai

Grandiose Supermarket opens in Dubai Sports City, continuing to expand its presence 

Continue Reading

September 2, 2020 | By RetailME Bureau

UAE-based retailer Lulu Group has signed an agreement with the Royal Commission 

Continue Reading

August 31, 2020 | By RetailME Bureau

UAE-based supermarket chain Spinneys has announced the winners of its incubator programme 

Continue Reading

August 30, 2020 | By RetailME Bureau




Download Images RetailME Magazine