Retail rentals declined globally during the first quarter of 2009 as the recession impacted consumer spending across the world, according to consulting firm CB Richard Ellis (CBRE).
In Dubai, store rents fell by 10 per cent as it did in Athens, Barcelona and Dublin, CBRE said in its "Global Market View on Retail" report.
"A lot of the rents in Dubai are contracted or fixed over a time period, so they have not changed. When these rents come up for review, they are likely to be revised," Mark Morris Jones, Director of Retail for CB Richard Ellis told Emirates Business.
New York topped the list of most expensive retail locations at $1,800 (Dh6,606) per square feet, followed by Hong Kong at $975 per sq ft, Moscow at $790 per sq ft, Paris at $776 per sq ft and Tokyo at $771 per sq ft.
Data released relating to economic performance during the first quarter of 2009 reveals that serious economic declines are now being seen in most countries around the globe. Since the end of last year, most major economies, save China and India, have seen significant negative growth.
The pace of the decline is now decelerating for many key variables, but "getting worse more slowly" does not constitute a recovery, and many of the impacts of previous declines have yet to become fully apparent in the retail property market, the report said.
The International Monetary Fund estimated that global GDP contracted 7.5 per cent in the fourth quarter of 2008, and an equally dismal performance occurred in Q1 of this year.
Few markets will be immune to the effects of such a slowdown, but the full impact is taking time to work through the system. However, consumer sentiment is now being hit sharply in most parts of the world.
Varying combinations of rising unemployment, subdued wage growth, falling house prices, slump in the value of personal savings portfolios and a high personal debt burden are putting consumers very much on the defensive, said CBRE.
Major purchases are being delayed or deferred indefinitely, and shoppers are becoming increasingly price-conscious in their purchasing decisions. As a result, budget and discount retailers are benefitting, as are some food stores as people substitute home entertaining for dining out, CBRE added.
Dubai ranked fourth among global retail cities
Dubai has been ranked fourth among the top 15 global retail cities in 2008, with 46 per cent of leading retailers having a presence in the city, according to the latest retail sector special report from CB Richard Ellis.
London topped the list with a presence of 59 per cent of global retailers followed by Paris and New York.
Retailers from all sectors continued to expand their global footprint during 2008 despite a rapid weakening in
business sentiment and increased risk aversion
in response to the global economic downturn.
The Middle Eastern, Asian and Eastern European countries dominating the list of new retail openings and franchises across the world, the report added.
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