Dubai: Dubai’s next big gold and jewellery destination will open for business in the second quarter of 2020, with retailers having already made “commitments” for more than 100 of the 295 outlets. The location, right next to the existing Deira Gold Souq, takes up the stretch from the Shindaga Tunnel to the edge of Hyatt Regency.
But the developer behind the project insists on one point — “This is not the new Gold Souq but an extension of the old,” said Issam Galadari, CEO of Ithra Dubai, the real estate division of Investment Corporation of Dubai (ICD). “We are in no way disconnecting ourselves from the existing Souq. Instead, the effort is to bring about more value to the entire area and for the gold retail sector.
“What we will not do is forget Dubai’s trading culture and what that means for the old Souq.”
We didn’t just create the rental terms by ourselves — we did a proper check and have come up with a range that is fair to everybody.
It was October last year that Ithra unveiled the extension project to the local gold trade and other potential tenants. Lease rates for the new outlets will “start from Dh700 a square foot”, and jewellery retailers can book from a minimum of three years.
According to Galadari, the rental rates are in sync with market trends and also match the level of services Ithra will provide that entire cluster.
“We didn’t just create the rental terms by ourselves — we did a proper check and have come up with a range that is fair to everybody,” the CEO said. “And we have tried to fulfil the requirements of future tenants at the extension but the entire gold trade in the Deira Souq.
“We were also clear from the beginning that we will not be taking any “key money”. (Key money is a time-tested practice in Dubai’s retail space, where tenants offer landlords a flat sum over and above the rental terms agreed upon.)
At the existing Gold Souq, key money has been a fact of life for decades now. During times of peak demand for space, it could be as high as Dh5 million to Dh6 million for a single outlet, said Anil Dhanak, Managing Director of Kanz Jewels. But in recent times, it has come down significantly, and even been nonexistent on some of the latest deals.
“As for current rents in the old Souq, it could be Dh1 million for a single store in a prominent spot. But there are some buildings where rents have hardly changed all this while, and still go for Dh11,000 a year.
“There is definitely a good deal of interest in the Souq extension and the possibility of attracting a new generation of gold buyers in an updated retail environment.” (Kanz has expressed interest in three potential locations at the extension, for store sizes of 1,000-1,500 square feet apiece.)
Revive the entire area
While Ithra’s mandate extends only to building the extension, Galadari reckons that change will not be confined to the new areas. “Some of the existing landlords at the old Gold Souq will take all that’s happening next door when they plan to renovate their facilities,” he added. “We are working to make sure that the entire Gold Souq area — new and old — remains an attraction to everybody. And that it will be one of the areas visitors to the city need to tick off before they leave Dubai.”
Not just the Gold Souq extension
Along with building the Gold Souq extension, Ithra Dubai is putting its resources behind a transportation hub to serve the wider Deira area.
The “Transit-Oriented Development” will incorporate a bus station, the Palm Deira metro station, a taxi assembly line and parking lot. All this on a site measuring 25,000 square metres. Plus, there will be a mixed-use complex for office space, a Days Inn Hotel, retail outlets and more.
The stated intention from the TOD investment is to “make people’s lives easier by reducing the distance between all three vital centres — their place of residence, their place of work and their place of leisure.”
“We are working on maximising the best way to attract people to Deira,” said Issam Galadari, CEO of Ithra Dubai.