Dubai will tap into its growing commuter base to increase revenues by expanding retail operations at its metro stations.
Currently 80 companies, including the Dubai government-owned petrol station operator Enoc’s Zoom convenience outlets, are located inside Metro stations, taking up 77 per cent of the retail space. The Roads and Transport Authority (RTA) is now seeking to fill up the remainder.
Carrefour is expected to open at Union Station in the second half of the year while UAE Exchange, Marina Pharmacy and Mashreq already have a presence across the Dubai Metro network.
There are a total of 197 retail units on the Green and Red lines with 152 occupied, including 41 Zoom outlets. Additionally, there are 190 locations for ATMs. Last year, about 138 million people used the Metro, or 450,000 passengers a day, according to the RTA, up from 110 million in 2012.
“RTA is trying to get the best mix of tenants, not only for the riders but also to serve the area around the stations as a community centre,” said Andrew Williamson, head of retail at the professional services consultancy JLL.
“There is a positive response from the retailers as they see a growth in the ridership in the long term.”
The RTA has appointed the property broker to lease and manage the retail space at the Metro stations, it said yesterday.
While Zoom outlets offer the usual commuter necessities including food, drinks and newspapers, the RTA has expanded authorised retail activities to include florists, footwear and fashion accessories, white goods, mobile phones, tailors and health and beauty.
With available units ranging from eight to 645 square metres, the prices of retail space vary according to location, footfall and the community.
JLL and the RTA declined to disclose any prices. The rental lease usually runs for two years, but the RTA will consider a longer duration for large units.
While strategic Metro stations such as Deira City Centre, BurJuman, Burj Khalifa/Dubai Mall, Business Bay, Ibn Battuta, and Dubai World Trade Centre Station quickly attracted retailers when the RTA began leasing in 2009, other locations such as those near Jebel Ali could find it tougher.
“Every retail location faces challenges, but it’s about identifying the need around the area,” Mr Williamson said.
“Retailers will always demand the locations with the highest footfall, but they will also look for niches that suit the ridership of each Metro station.”
The move from the RTA comes amid increasing retail rents in Dubai’s malls.
However, prices at secondary malls and community centres are increasing at a slower rate compared to larger malls. In the second quarter, rents at secondary malls grew 36.8 per cent to Dh2,363 per square metre, according to JLL. At primary malls, rents grew 54 per cent to Dh7,700 per sq metre.
In the second half of the year, 31,000 sq metres of retail space are expected to come on to the Dubai market, with another 214,000 sq metres next year.
ssahoo@thenational.ae
Follow The National's Business section on Twitter
