Dubai Mall's Gold Souq is finally set to be renovated after two years of intense wrangling between Emaar Properties and retailers about the lack of visitors.
Video: Dubai Mall to be renovated
Emaar to renovate gold souq in Dubai Mall
Jewellers have been issued with eviction notices and told to clear their shops before September 3, when work is expected to begin on transforming the souq.
Many jewellers have not been offered a new store despite, they say, having been promised one months ago when Emaar first began considering a renovation. "We have received eviction notices, 25 companies," said Anand Datwani, the owner of Kyra Store. "We have been told to hand over our premises and [Emaar] has not guaranteed us a new store and privately they said they would."
Other retailers, however, say they have been given generous terms on new stores in the refurbished souq, with some being offered 25 per cent off their current rent as compensation for moving.
"It's good news, we have some hope and the changes will make it easier for people to come in the souq," said one jeweller who did not want to be named.
The gold souq retailers have been in talks with Emaar Malls Group, a subsidiary of Emaar Properties, for about two years on rent reductions and a redesign of the souq layout to encourage more customer traffic.
While Dubai Mall hosted a record 47 million visitors last year, the Gold Souq's enclosed design and maze-like corridors is disconcerting for shoppers.
A number of entrances are being significantly widened to allow easier access to the souq, which will mean some stores outside the area will also be affected.
The total number of stores in the souq is expected to be cut from more than 200 to about 50, with a large anchor fashion store put in place.
Emaar declined to comment on the Gold Souq refurbishment.
A spokesman for Emaar Malls said in April, however, the redevelopment plan within the Gold Souq occupied less than 2 per cent of the total net leasable area of 350,000 square metres in Dubai Mall.
In January, Emaar agreed to offer free rent to any jeweller if it planned to move in its renovation plans, and so many have been paying nothing in the past seven months.
For a small shop, Emaar charges Dh300,000 (US$81.675) a year in rent. Jewellers say many of their peers reneged on rental contracts in the past year due to the low footfall and left the mall owing millions of dirhams to Emaar.
These issues have now been resolved, jewellers say, which means Emaar can now go ahead with the refurbishment.
"They want to start renovating very quickly and finish quickly so they can start the rent again," said one jeweller. Emaar has indicated the renovation will take six months until January, but many jewellers expect it to be longer due to the complexity of designing and maintaining the look and feel of the souq.
Mr Datwani spent more than Dh1m fitting out and designing his store in the Gold Souq and said he had not recouped any of that cost because the store had never made a profit. "The only time we saw any hope was during the prime months of November through to February," he said.
"We will have a look for a new location somewhere. There will be loss of business, definitely."
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UAE currency: the story behind the money in your pockets
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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THE BIO
Age: 33
Favourite quote: “If you’re going through hell, keep going” Winston Churchill
Favourite breed of dog: All of them. I can’t possibly pick a favourite.
Favourite place in the UAE: The Stray Dogs Centre in Umm Al Quwain. It sounds predictable, but it honestly is my favourite place to spend time. Surrounded by hundreds of dogs that love you - what could possibly be better than that?
Favourite colour: All the colours that dogs come in
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
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England squads for Test and T20 series against New Zealand
Test squad: Joe Root (capt), Jofra Archer, Stuart Broad, Rory Burns, Jos Buttler, Zak Crawley, Sam Curran, Joe Denly, Jack Leach, Saqib Mahmood, Matthew Parkinson, Ollie Pope, Dominic Sibley, Ben Stokes, Chris Woakes
T20 squad: Eoin Morgan (capt), Jonny Bairstow, Tom Banton, Sam Billings, Pat Brown, Sam Curran, Tom Curran, Joe Denly, Lewis Gregory, Chris Jordan, Saqib Mahmood, Dawid Malan, Matt Parkinson, Adil Rashid, James Vince
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The specs
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WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
Bundesliga fixtures
Saturday, May 16 (kick-offs UAE time)
Borussia Dortmund v Schalke (4.30pm)
RB Leipzig v Freiburg (4.30pm)
Hoffenheim v Hertha Berlin (4.30pm)
Fortuna Dusseldorf v Paderborn (4.30pm)
Augsburg v Wolfsburg (4.30pm)
Eintracht Frankfurt v Borussia Monchengladbach (7.30pm)
Sunday, May 17
Cologne v Mainz (4.30pm),
Union Berlin v Bayern Munich (7pm)
Monday, May 18
Werder Bremen v Bayer Leverkusen (9.30pm)
The specs: 2018 Nissan Patrol Nismo
Price: base / as tested: Dh382,000
Engine: 5.6-litre V8
Gearbox: Seven-speed automatic
Power: 428hp @ 5,800rpm
Torque: 560Nm @ 3,600rpm
Fuel economy, combined: 12.7L / 100km
