Dubai's Lamcy mall auction fails again - can this mall still find a buyer?

Dubai: Another round of trying to auction off Lamcy Plaza, Dubai’s once popular shopping destination, has come to nothing. There were no bids as the auction closed, and with the minimum price set at Dh185 million. This is the third time the community mall, which has remained shuttered since a fire broke out in 2017, has been put up for bidding.

The first auction process for the multi-storey property was last year and with the bidding price set at Dh210 million.

The chances are that those trying to sell off the property will need to go through a private sale process to find an interested buyer. According to industry sources, while the minimum bid price of Dh185 million will indeed be attractive, anyone interested in buying the property will also be calculating the extra funds that need to be put in to re-open the property.

“Those additional funds needed to get the property back in shape will be a heavy requirement first up,” said an industry source. “The problem is that if someone acquires it, they have to start the process of repairing and re-opening it without delay – if they want to recover their investments.”

Now, how much extra anyone has to spend on getting the mall back to operations is anyone’s guess. Conservative estimates place it as adding another Dh50 million to Dh100 million.

The unfortunate part is that if Lamcy re-opens as a community mall, it is more or less assured of a solid start. “For one, there’s history involved as Lamcy was among the first of Dubai’s neighbourhood/community malls,” said a retailer. “It can reclaim shopper traffic with some tweaking of the retail mix.

“For instance, a re-opened Lamcy could have bigger representation of gold and jewellery outlets, especially for those jewellers who want options other than Bur Dubai Meena Bazaar or Karama to expand their reach.”

So, the waiting game continues for one of Dubai’s most identifiable real estate assets – a timeline that’s now stretched past 8 years.

Other industry sources say that if a consortium of buyers were involved, that would help them better manage the costs of re-opening Lamcy. “Since it’s an auction process, the ‘seller’ - which could the banks owed money - could also support any buyer by asking for staggered payments,” said a source.

Property auctions hugely popular in Dubai

During the same period when the Lamcy auction was open, another property in Dubai was getting a massive response.

"There were more than 207 bids for that abandoned project in JVC less than 9 hours before the close of the auction," said a property consultant.