Retail rent declines slowing

Now shoppers are watching their wallets, retailers are much more cautious and some landlords are more willing to negotiate to fill their centres, said the manager of Cold Stone Creamery in the UAE.

?Before you could say the landlords were ruling,? said Mr Mehta. ?Now more tenants are ruling in these projects. You can see the buying power of the tenants is much stronger at this time.?

As a result, the average rent for a new store in Dubai continued to fall in the third quarter of this year, though not as steeply as in the first half, real estate consultants say.

Rents declined by between 2 per cent and 3 per cent between July and September, said Craig Plumb, the head of research in the MENA region for Jones Lang LaSalle, compared with a 6 per cent drop in the second quarter.

?I don?t think retail rents will fall as far as with other types,? he said. ?They will not halve as they did with office and residential rents.?

Property rental rates in Dubai have fallen across all sectors since the onset of the economic downturn. Prime office rents are down by roughly half and residential rents have slumped as much as 35 per cent since the end of last year, according to Jones Lang LaSalle?s latest city report.