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Retail lease rates continue to fluctuate keeping in mind the increase in demand and also the fact that a lot of the malls and super malls that were being developed or expanded are now fully open for occupancy.
According to Jones Lang LaSalle (JLL), average rents in retail centers in the Abu Dhabi Island have increased by 4% this quarter to reach approximately Dh3,000/sq.m. per annum from Dh2,887/sq.m. per annum in the last quarter of 2013.
However, average rents of retail centers outside Abu Dhabi Island have decreased by 4% to reach approximately Dh1,820/sq.m. from Dh1,900/sq.m. per annum in the last quarter of 2013. JLL's research shows that rents have increased this quarter but are expected to remain stable in the short to medium term due to increased competition from new high quality malls. Average rents have decreased this quarter outside of Abu Dhabi Island but are expected to stabilize at current levels throughout 2014. In Dubai, the top open market net rent for a standard-sized store in prime super regional centers has increased in Q1 2014 to stand at around Dh8,000/sq.m. The average rent across primary super regional malls stands at Dh6,900/sq.m.
CBRE research says that the average retail rental rates for Abu Dhabi stand at Dh284/sq.ft. per annum, compared to Dh456/sq.ft. per annum in Dubai. JLL research says that rental growth is expected to continue in 2014 in most primary and modern secondary malls. Citywide retail vacancy is estimated to have dropped slightly to 10% in the first quarter of 2014 as demand for retail space remains strong, and large primary centers are almost fully occupied.
As for the Northern Emirates, Asteco research shows that the Sharjah commercial sector has also seen leasing rate increases in several popular locations over the last quarter, with the Corniche and Al Wahda Street areas recording growth of eight percent and five percent respectively despite continued sector stagnation with just two percent growth overall.
• Average rents in retail centers in Abu Dhabi Island increased by 4%
• In Dubai, avg. rent for primary super regional malls is Dh6,900/sq.m.
• The Corniche, Al Wahda Street areas in Sharjah recorded growth
Source: Urmila Santosh, Special to Properties
The writer is a freelancer