Dubai International Financial Centre (DIFC), the emirate's financial free zone, aims to lease 90 percent of units at its Dh1billion (US$272 million) Gate Avenue retail development before it opens in 2018, to avoid creating a “ghost town,” the official leading the project said. Gate Avenue is a retail podium linking together the numerous towers of the DIFC complex.
DIFC is offering incentives and collaborating with tenants to meet their needs in a slow retail market, according to Nabil Al Kindi, chief real estate officer at DIFC.
Property owners in Dubai's retail sector are struggling to fill vacant outlets and are more willing to negotiate rents with existing tents amid increasing supply. Super-regional and regional malls have also recorded drops ranging between three-to-five percent in headline rents on a quarterly basis. The large volume of potential new supply will keep retail rents under pressure over the next 12 months.
Under DIFC's original master plan, Gate Avenue was expected to contain 224 retail units, but Mr. Al Kindi said some tenants are taking two to three units and knocking walls through to create bigger spaces. As a result, he is targeting 185 units with an average unit size of 2,000 square feet (186 square meters).
The main structure of the development is 95 percent complete and will be finished in April 2018. After that, occupiers will commence the fit-out of their units.
DIFC is targeting a mix of local and international retailers and food & beverage operators.
Spanning 660,000 square feet (61,316 square meters) of built-up area and 880 meters in length, Gate Avenue will link the podium levels of all buildings in DIFC, from the Gate Building to the Central Park Towers.
On completion, the development will comprise a mix of dining, boutique, retail, and entertainment options, as well as a mosque.
It is part of broader plans to expand DIFC and prepare for more companies to enter the free zone in the years ahead. Under its DIFC 2024 Strategy, the free zone aims to double the number of registered financial firms to 1,000 by 2024, from 362 in 2014. The joint venture between Investment Corporation of Dubai, the emirate's sovereign wealth fund, and Brookfield Property Partners, is building a $1 billion development within the DIFC district to cater to the future plans.
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