Emaar Malls' net profit dipped marginally year-on-year for the second quarter of 2019 as competition for customers continues to intensify.
The operator of the Dubai Mall reported a profit of Dh546 million for the quarter, down from Dh554m in the same period of last year, although revenue rose 8 per cent to Dh1.15 billion. Net profit for the half-year period, however, increased 3 per cent to Dh1.13bn over the year-before period and half-year revenue climbed 6 per cent to Dh2.23bn.
“Emaar Malls has consistently focused on delivering enhanced customer experiences, which drive our sustained growth - both through our malls and Namshi, our fully-owned online business,” said Mohamed Alabbar, chairman of Emaar Properties and a board member of Emaar Malls.
Emaar Malls said sales of online fashion retailer Namshi increased 10 per cent year-on-year to Dh4222m for the half-year period.
Emaar Malls operates at the premium end of Dubai’s market and its flagship Dubai Mall - the world's biggest mall by area - has helped the company to maintain strong levels of occupancy. It reported an occupancy rate of 92 per cent across its portfolio, just less than the 93 per cent occupancy rate announced for the same period last year.
By contrast, occupancy rates for malls across Dubai declined 4 per cent year-on-year to 82 per cent, according to a second-quarter UAE real estate market report released in July by consultancy JLL. It said that prime rents for retail space fell 4 per cent year-on-year and are expected to continue declining over the next year, as 620,000 square metres of new space is scheduled to come to market by the end of the year, although it said completion timelines were likely to slip.
“The retail market faces the greatest threat of oversupply of any sector, with major delays being expected and not all the announced projects actually materialising,” the JLL report said. “The retail market is also under pressure from external factors such as changing consumer trends [with consumers moving away from luxury brands] and the rise of online retailing in the region. To counter these concerns, mall operators are constantly looking for new strategies to boost dwell time, operating performance and the tenant mix of their projects.”
Emaar Malls said that it managed “impressive” visitor footfall of 68 million in the first six months of the year, a 2 per cent increase on the same period last year. Visitors to Dubai Mall were also up 2 per cent to 41 million.
The mall operator's two new extensions to Dubai Mall – Zabeel and Fountain Views –are scheduled to open this year. These will provide a direct link to the mall both from Sheikh Mohammed Bin Rashid Boulevard and from Financial Centre Road.