Supply-demand imbalance driving UAE retail rents

Supply-demand imbalance driving UAE retail rents

A shopping mall in Dubai. — File photo

Published: Mon 27 May 2024, 7:45 PM

A supply-and-demand imbalance in Abu Dhabi and Dubai continued to drive rental performance as average retail rents in Abu Dhabi and Dubai rose by 14.7 per cent and 10.5 per cent respectively in Q1 2024.

Abu Dhabi’s retail market experienced a slowdown during the first quarter as rental contracts registered a decline of 8.1 per cent compared to the previous year's 7,779.

“This decline has been primarily driven by a slowdown of 8.8 per cent in renewed rental registrations and a drop of 6.6 per cent in new contracts registered,” CBRE Middle East said in a market analysis.

In Dubai’s retail market, 23,139 rental contracts were registered in Q1 2024, up by 0.2 per cent from the year prior. Over this period, new rental registrations increased by 1.6 per cent, whereas renewed rental registrations declined by 3.4 per cent.

“Although a significant portion of demand continues to originate from the food and beverage sector, we are seeing an increase in the number of global and international retail brands looking to establish or expand in Dubai’s core locations despite the limited availability of stock and elevated occupancy levels,” it said.

Taimur Khan,