UAE malls and retailers to adjust opening hours again

FOOTFALL LEVELS MAY IMPACT FOOD AND BEVERAGES SECTOR THE MOST

UAE malls and retailers are in for another round of adjustments to do with retail timings shifted from 9am to 7pm. But even before the latest change in operating hours, the one key requirement — shoppers — was still missing.

“Low footfall does not bode well for successful retailing,” said David Macadam, Chief Executive, Middle East Council of Shopping Centres. “Some F&B operators may find the low traffic numbers will make operations not viable, given food wastage and staff costs incurred.”

This imbalance in supply and demand — now magnified because of low shopper turnouts — can impact overall occupancy levels at UAE malls.

“Many shopping centre management teams may benefit by taking back low [revenue] producing outlets and reletting or repurposing them for a more exciting offering in the future,” said Macadam.

If this holds true, expect some major occupancy changes in the second-half of the year. But that too would require a give-and-take mentality on the part of mall owners — current rental agreements have strict clauses leading to retailers wanting to opt out ahead of their tenure ending. The penalties are quite substantial.

Need for a reset

The Covid-19 imposed crisis thus presents an opportunity to set right the imbalance between retailers and mall operators. The need is for landlords to be flexible and think about taking any measure to avoid their units staying vacant for long.

“We anticipate the financial and marketing relationships between retailers and landlords to evolve,” said Panos Linardos, chairman of the Retail Leaders’ Circle. “They will take joint responsibility for footfall and the success of stores. Flexible language in contracts will evolve for the balance of the year.”

Landlords can offer retailers direct incentives to tide over this difficult phase, in the form of a rent holiday, turnover rent-only leases and more. Such measures will help retailers ease back into full-fledged operations once normal operating hours resume.

Many shopping centre management teams may benefit by taking back low [revenue] producing outlets and re-letting or repurposing them for a more exciting offering in the future.”

David Macadam | Chief Executive, Middle East Council of Shopping Centres

Ahmed Ramzan/Gulf News Shoppers at Mall of the Emirates in Dubai. Some major changes in the occupancy mix may be imminent in the second-half of the year for malls in the UAE.