Retail is not enough for future malls
MEYDAN ONE MALL WILL ONLY HAVE 50% OF LEASABLE SPACE EXCLUSIVELY FOR SHOPPING
Build a massive mall in Dubai and then set aside only 50 per cent of the leasable area for retail shops? The developer of Meydan One Mall — which will have 300,000 square metres of gross leasable area. — believes the mix is just right for the reshaping of retail in this market.
Typically at existing malls in Dubai, the retail component would be in the 70 per cent and more range.
“Traditional — or boring — retail is dying,” said Fahad Abdul Rahim Kazim, VicePresident for Meydan Malls. “But retail as such is not dead, and there are some interesting stats coming out of the US.
“While the big-box outlets are closing down, the millennial and Generation Z shoppers — 98 per cent of them — still shop at brick-and-mortar stores. They may not be going to the big-boxes, but they are spending some or most times at outlets that offer seamless experiences and personalised services.
“That’s what we are trying to bring to Meydan One Mall. Another super-regional mall will not do justice to Dubai’s retail landscape, and neither will do it justice to Dubai’s tourism landscape.”
Most striking detail
Since it was first announced, the most striking detail at the future mall — with a location near the racecourse and grandstand — was to be its one-kilometre long ski slope, the longest indoor one in the world. (The one at Mall of the Emirates is 400 metres at its longest stretch.)
But with the Meydan One Mall structure — in a ground plus three-storey format and 850 spaces — now 60 per cent complete, it is being made clear that its impact will not be just the ski slope and the retail mix. It is headed for an ■ The Meydan One Mall is headed for an end 2019 or early 2020 opening date. (The ski slope could be opening later.) For its leasing programme, the Meydan One Mall management is rewriting some of the ways deals are typically structured in the retail sector.
“What we don’t have is the whole concept of net effective lease rates,” said Fahad Abdul Rahim Kazim of Meydan Malls. “In essence, this is the case at most of our competitors’ malls.
“In such contracts, if at any year, if a certain percentage is hit, the tenant’s base lease rate goes up to that level. What we do is agree on a base rate that both parties are comfortable with. We can always reset back to an earlier agreed base rate as the market goes through cycles.
“In the tenant-landlord relationship, we are not looking at placing the onus on one in favour of the other. We have looked at issues mall tenants have faced in the past and removed any ambiguity. This, we have tied to address in our rent agreements.” end 2019 or early 2020 opening date. (The ski slope could be opening later.) “We set out intent on making it into a lifestyle destination and not be labelled as just a mall,” said Kazim. “Entertainment will be the other component, with 15 per cent of the leasable area.
“We will keep pushing towards differentiation, either regional or a more local one. This could be about bringing concepts to the region for the first time.
“We will not try and regurgitate the same things that keep happening in every mall — the same sort of food courts and the same stores.”
As it is, in the near future, Dubai’s shoppers will be welcomed into the city’s next-generation malls, including the Nakheel Mall (on the Palm) and Deira Mall (on Deira Islands), as well as the Dubai Hills Mall (at the intersection of Al Khail and Umm Suqiem roads), and another at Nad Al Sheba.
At Meydan One Mall, designed along the lines of a racetrack, the leasing mix will also place due importance on smaller formats. The intention is to rope in home-grown concepts that are still in the early phase of their operations.
“We are not going to lock them into a long-term lease agreements; these will be set up as pop-up stores,” said Kazim. “Also, we take a bit of that capex (capital expenditure) these brands would otherwise have carried.
Fahad Abdul Rahim Kazim | Vice-President for Meydan Malls
Exposures
“This way, they are not building from scratch and we give them exposures that could be a month, to even three to six months. They can see whether there is demand for their product and good feedback. And we are placing them right at the heart of the mall development and not throwing them into a corner.
“Then we can graduate them into a more permanent store. This concept will be applied for services and F&B outlets as well.
“Through these in-mall areas, we can incubate up and coming home-grown brands and give them a platform to present themselves to the market.”