Six years after the global financial crisis brought construction sites on Palm Jumeirah to a standstill, Nakheel is aiming to turn the man-made island into a shoppers paradise.
More than 2.1 million square feet of shops, bars and restaurants are set to open on the island – accounting for almost 20 per cent of the developer’s entire planned retail portfolio.
It is part of a plan to open more than 10,000 retail units across Dubai as it seeks to boost recurring revenues while reducing its exposure to cyclical property markets.
“On Palm Jumeirah we are creating a shopping destination within the island and a waterfront dining experience that every tourist coming to Dubai will want to view,” said Omar Khoory, director of Nakheel Retail, in Dubai.
In addition to its three major retail developments on the island at Nakheel Mall, The Pointe and the Golden Mile, the developer is also adding food and beverage outlets at its Palm Views East and West projects. An 11-kilometre boardwalk around the island will also have retail concessions.
The Nakheel Mall, under construction on the trunk of the island is currently about 55 per cent leased according to Mr Khoory.
Waitrose and Vox Cinemas will be among the tenants, while talks are under way to secure an anchor department store.
Leasing is also under way on the Golden Mile strip where the Spinney’s supermarket group is currently fitting out its store. Other tenants will include Fitness First, Shakespeare and Co and Nando’s.
Last week Nakheel reported first quarter profits more than doubled to Dh1.35 billion, helped by its fast expanding retail portfolio.
The flurry of retail leasing activity on the island coincides with major expansions Dragon Mart and Ibn Battuta Mall that will include a vast indoor garden with a glass roof that can be opened during the winter months.
A wave of mall construction under way in the city is likely to put pressure on retail rents say analysts at a time of faltering consumer confidence and as the strong dollar also hits tourist purchases. JLL, the real estate consultant expects “stagnant” performance from the sector this year.
Still, Mr Khoory believes the company’s planned retail expansions in the city are located in areas of rising demand and population growth.
“Shopping is lifestyle in Dubai,” he said. “It is entertainment. Maybe people are becoming more cost conscious and looking online, but that pushes retailers to give more attractive offers.”