Centers attributed to increased operational costs and improve servicesTruth Consultancy
The closure of shops in the commercial centers of Abu Dhabi after raising rents by up to 40%
Date: November 02 2016
Source: Abir Abdel Halim – Abu Dhabi
Saw the commercial centers in Abu Dhabi, finally, closure of a number of shops, some of the global brands, as a result of raising the annual rent for these shops rates reaching more than 40%.
At the time officials called for shops install rental values, if not reduced, commercial centers considered that the rise came as a natural result of increased operational costs, improving services, in light of the intense competition between the centers.
Furthermore, economic expert called for a review of the high rental values for shops in malls in Abu Dhabi, and stop the increases now, pointing to the need for the realization of the law of supply and demand and taking into account the changing economic conditions, especially in times of slowdown.
He stressed that maintaining the moderate values of rents contribute to the recovery of the investment climate, especially in the commercial sector.
In detail, he said the director of store clothes and shoes from the brand famous, one of the major commercial centers in Abu Dhabi, Patrick Dave, said that «the shop closed its doors two weeks ago, in conjunction with the closure of a number of other stores in the mall itself, despite the presence in the center since more than seven years. »
Dave explained that «the management of the Centre insisted on raising the annual rent for the shop of AED 600 thousand to 850 thousand dirhams, an increase of about 42%», referring to «difficult to pay such a high rent, as well as other operating costs and wages of workers, and make a profit, it paid by shop owners to close shop rather than the continuation of open and realize losses. »
Dave added that «the talks with the management of the Centre after insisting on the increase failed, especially since there are currently some of the recession, as well as that there was a difficulty in paying the original lease.»
He called Dave «install if not rental values reduced», warning that «the continuation of these increases will lead over time to the disappearance of some well-known brands among consumers of the commercial centers, and close more stores, and thus influence the investment climate in business activities in the emirate».
Increases are not justified
For its part, sales official said at a shop of household items that have closed their doors, and finally, Habiba Abdullah, it is «looking for another job two weeks ago after closing shop due to the insistence of the mall management to raise the rental value of the place of AED 700 thousand to 970 thousand, an increase of close to 40%. »
Abdullah added that «our shop closed its doors along with a number of other shops, and some of the popular brands in the commercial centers are known, as a result of increases in rents unjustified».
The director of the furniture and furnishings store, Naim Rizkallah, who closed the doors of his shop in a mall, he said that «surprised by the claim center management to raise the shop Rent million compared to AED 730 thousand dirhams Currently, an increase of 37%».
Rizkallah and added that he «does not make sense at a time down the price of oil began residential rents are falling, that happens a rise in rental shops centers rising from the ground», adding that «the price cuts are the only ones experiencing brisk sales, while most of the passes times of the year a large softly. »
He called reducing rents shops or at least be installed for a period of two or three years, after expectations down the pace of business activity, pointing out that there are «very difficult to cover costs and make a profit, and therefore, on what basis is required for this large increase».
In turn, according to a major commercial centers management in Abu Dhabi, which saw the closure of a number of stores it, in a written response to questions «Emirates Today», that «administration deems it necessary to raise rents into account the high operational costs and to provide more efficient center services, in the context of intense competition between the various commercial centers in the city ».
Directors considered that «the improvement of services and distinguish them would be in the interest of all the shops, because it will attract more shoppers, and thus achieve more profits», noting that «the mall is currently undergoing many changes, and plans to add a distinct brands rather than those that have closed down».
It was agreed the CEO at another shopping center management, has also seen the closure of a number of shops Finally, Nauman Masood, in that the high operational costs and improve services behind the rise in rental values.
Masood said that «there are currently negotiations with officials of some shops that have closed down in order to reach a compromise on the increase, as well as a second negotiations conducted with other shop owners to rent-free shops».
He added that «the intense competition makes it imperative to work on adding new brands and improve the entertainment and technology in place to attract more customers».
, The economist said General Director of the company «Truth» Economic Consultancy, Reda Mosallam, said that «the recent period has seen the closure of a significant number of shops and a number of shopping malls in Abu Dhabi after insisting on new rises in rental values».
«reconsider the high rents for shops commercial centers in Abu Dhabi and stop large increases», pointing to the need for the realization of the law of supply and demand and taking into account the changing economic conditions, especially in times of slowdown.
He stated that «maintaining profits that are achieved through the current rents better than the closure of some stores for long periods, which could lead to losses in the long term», adding that «maintaining the moderate values of rents contribute to the recovery of the investment climate, especially in the commercial sector, which is a catalysts of economic growth in the UAE. »