- City Fajr Shuruq Duhr Asr Magrib Isha
- Dubai 04:54 06:08 12:11 15:33 18:08 19:22
Mall operators in Dubai are increasing looking to sign 20-year leases with anchor tenants, which helps them increase asset value and footfalls, according to experts.
Matthew Jay, Senior Retail Consultant, CB Richard Ellis Middle East, says: “It gives security of tenure to both parties and for landlords it can help increase asset value particularly when they sign a 20 year lease with a strong covenanted tenant.”
Stuart Gissing, Regional Director, Colliers, adds: “A straight 20-year lease in not uncommon, but longer leases aregenerally structured in blocks with options of breaks in between such blocks.
Securing an anchor for the long term would generally be a favourable position for a development, but would certainly depend on what that anchor is and what the positioning statement is of the whole development in order to benefit the other occupiers.
The anchor must be used as a traffic draw or magnet for consumers.”
An Emaar Properties representation in November reveals that the developer’s preferable lease terms for non-anchor tenants are on three to five years, with anchor tenants agreeing to between 10 and 20-year tenancy agreements.
Asked if leases for non-anchor tenants were of longer term as well, Jay says they are typically between three and five years, while Gissing mentions leases are commonly beyond the five-year period.
“It really depends on how much space is occupied under a single lease contract.
A specific brand may not necessarily be the main anchor, but is a major space user (MSU), as such a longer term may be more beneficial to both parties and in particular the tenant who would seek to depreciate over a longer period due to the expense of fitting out and operating that unit and brand,” he adds.
According to Colliers, the cumulative retail supply in Dubai by the end of 2010 was approximately 2.48million square metres gross leasable area (GLA), while it was about 609,700square metres GLA in Abu Dhabi.
It expects additional supply of about 52,500 square metres GLA and 200,000 square metre GLA in Dubai and Abu Dhabi, respectively, in 2011.
Cushman & Wakefield recently said Abu Dhabi was set to exceed Dubai’s per capita retail concentration by the year 2015 when its retail space doubles to nearly 1.8 million square metres.
Abu Dhabi offers an estimated 936 square metres of shopping space per 1,000 residents with Dubai offering 1,400 square metres of shopping space per 1,000 people the maximum among any other city across the world.
The United States has about 1,000 square metres per 1,000 people, and European countries have just over 200 square metres per 1,000 people.
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