The Abu Dhabi based retailer Lulu Group International launched its first mall in Dubai yesterday in a joint venture with Dubai Silicon Oasis.
Avenues Mall Silicon Oasis will look to encourage entrepreneurship and SMEs by offering 2,000 square metres of space to the start-up community at a preferential rent.
“This mall will allow start-ups to get premium space at very low rent,” said Yusuffali MA, the chairman of LuLu Group. He said the move was designed to encourage the local talent and alter the retail mix of the mall.
“Most of the UAE’s malls are dominated by international brands that have huge marketing budgets, we will level the playing field for SMEs. The start-ups will offer a real point of difference in our retail mix. While the plan is not fixed yet, we will offer the low rent for about three years so new businesses can establish themselves.”
The Dh1 billion, 2.3 million sq feet mall will be located opposite Zayed University on the Dubai-Al Ain Road and Academic City, which hosts nearly 30 colleges and educational institutions.
The support for SMEs in a mainstream mall is a first for Dubai. Nakheel has 16 million sq ft of retail space either delivered or under construction but offers no dispensation for SMEs. Majid Al Futtaim, meanwhile, the owner of Mall Of The Emirates and City Centre malls, is famous for its international brands.
“It’s a brilliant idea, because when you are starting out rent is the main burden for an SME,” said Elena Weber, the entrepreneur behind Icons Coffee Couture. “While the retail climate is cooling the rents are still eye-watering, – I have just been asked for Dh1 million rent for 9 sq metres of space, how can a start-up even think of that sort of outlay? Start-ups also have no leverage when it comes to negotiating rent so have to pay whatever is demanded.”
The thre- storey Avenues mall is expected to open in the fourth quarter of 2019 with 300 outlets, 48 food and beverage points, and a 12-screen cinema. Silicon Oasis now houses 60,000 residents with 80,000 expected by 2019. A hospital will open there next year as will Silicon Park a 150,000 sq m public green area.
“Academic City and Silicon Oasis need retail, definitely,” said Matt Green, the head of research and consulting at CBRE. “It will be interesting to see how Lulu manages the SME endeavour. Usually there has to be a payback which is not obvious at first. It could be a spur to more organic, local, brands and a more vibrant retail mix.
“We often hear that the malls all have the same shops and the focus on start-ups would definitely change that rhetoric.”
ascott@thenational.ae
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