Property developer Nakheel expects to sign more deals to build shopping malls outside its base of Dubai, its chairman told Reuters in an interview, as its home market matures and development picks up in other parts of the UAE.
Nakheel, the developer of the palm shaped islands off Dubai, this month agreed a deal to develop its first mall outside Dubai in Sharjah, the UAE’s third-largest constituent.
“We’re talking to other entities in the northern Emirates and other Emirates on new retail opportunities,” Ali Rashid Lootah (pictured) said on the sidelines of the World Retail Congress in Madrid. “We signed one contract for retail in Sharjah and will be announcing more for other Emirates.”
The wealthy southern emirates of Dubai and Abu Dhabi have traditionally attracted the largest and most glitzy real estate projects, but economic growth and demand from residents fleeing rising living costs in the south are starting to change that.
Lootah said there were still plenty of opportunities for developers despite weaker property market sentiment in the Gulf since mid-2014 as volatile oil prices prompted governments to cut spending.
“There are always market corrections, but there is no drastic drop in prices. Good locations still maintain good prices,” he said.
“We will be launching some new projects very soon. We’re very selective (about) what to launch, where to launch and when to launch, retail and residential.”
Lootah said most of Nakheel’s new retail projects were in existing developments such as the Palm and Deira islands, the latter part of a plan to attract 20 million visitors a year by the time Dubai hosts the World Expo exhibition in 2020.
Nakheel is responding to the downturn in the residential market by expanding more in hotel developments and reacting to the rise of ecommerce by shifting more mall space to entertainment and food and drink.
“More and more, the younger generation eat out. Malls are becoming more of a leisure activity, a destination to have a good time,” Lootah said.
Nakheel was at the centre of a debt crisis in Dubai in 2009 after a crash in real estate prices. It said in August 2016 that it had recovered from a $16bn debt restructuring with the final payment of an Islamic bond.
The state-owned developer in January reported a 58 per cent increase in fourth-quarter net profit.