Dubai
A tough retail environment clearly isn’t hurting mall developers’ prospects — Kuwait’s Tamdeen confirmed that it is at the 70 per cent mark on the leasing programme for the massive Al Kout Mall development in the Gulf state. This assumes significance given that the new extension is still a good 12 months from opening and at 750,000 square feet will be the largest retail stock entering the Kuwaiti market in 2017.
“The situation everywhere is tough, but in comparison, Kuwait’s prospects seem that much better,” said Shavak Srivastava, member of the board of directors at Tamdeen Shopping Centres. “What we wanted from the outset was a large number of brands as opposed to a few large tenants. It’s a strategy that worked well with the Al Kout leasing.”
The retail mix meant a larger store would only be just over 30,000 square feet, while the average would be in the range of 15,000 square feet. “Even with the brands, there is much more emphasis on getting in mid to upper-mid range labels than the high-end ones,” said Srivastava.
Once the new areas open for business in October 2017, the developer will close off the original mall for a complete refurbishment, which will then take about 12 months to complete. That would add up to 1.2 million square feet of retail area. The Al Kout destination will also include a “souq” element, which will be housed by names slightly more high-end as well as bridge brands. The overall cost associated with the Al Kout project is $230 million (Dh845 million).
Whether it be in Dubai or elsewhere in the Gulf, mall owners confirm that there is no let up in the level of retailer interest for any new space coming into the market ... and at lease rates that are little changed from the levels recorded before the downturn set in. Saudi Arabia’s Arabian Centres — the kingdom’s biggest operator — recently confirmed significantly high levels of interest for all of its new builds, while in Dubai the only constant is that there is only limited free space available at the ongoing expansions within the top destinations.
“As for Kuwait, it’s been a huge boost that all of the government led investments are carrying on, even in the current economic climate,” said Srivastava. “That’s spurred a lot of growth and reflected in the numbers we have had at our flagship mall — the 360. In the first nine months, the overall sales at 360 showed a small gain against last year’s numbers. That itself is phenomenal when you look at what’s going on.”
The 360 mall is inching closer to full occupancy, with a Bloomingdale’s store — spread across three levels and taking up more than 80,000 square feet — scheduled to open by February next. It would be the first in Kuwait.
“There are other projects in our portfolio such as the Tamdeen Square that will keep us busy in the short-term,” said Srivastava. “Our focus will remain very much fixed on retail while being selective with the hospitality projects we take on.”
