Manazel Real Estate, an Abu Dhabi-based developer of affordable housing, has set up a subsidiary to operate and manage malls and retail units.
The company said the subsidiary, Manazel Malls, will run its three-storey, 60,000-square metre Capital Mall in Mohammed bin Zayed City alongside retail areas in Al Reef and Al Reef 2. It will also run all of its future retail projects.
Manazel said the retail business supports a strategy of diversification and growing non-cyclical revenues in areas related to properties. It said the unit could also potentially operate malls on behalf of third parties as well as those in its own developments. In the long run, it will also offer “an opportunity to potentially seek a listing” for the division on the public markets.
Waleid Gamal Eldien, Manazel’s chief investment and commercial officer, said: “In line with our strategy, we are capitalising on our expertise in the residential and commercial real estate sectors by launching Manazel Malls to manage all of our retail assets.
“We have built an experienced team of executives to run this subsidiary and to ensure optimal performance while driving recurring revenue streams.”
The retail property market is showing signs of weakening, with rents in Abu Dhabi and Dubai remaining flat in 2015, according to the consultancy JLL. It said the market is likely to move in tenants’ favour as slowing sales dampen demand for new space at a time when the supply of retail property continues to increase.
Craig Plumb, JLL’s Mena head of research, said: “The growth in retail sales has slowed in the UAE during 2015 with some retailers struggling to meet high rental rates. This, in turn, has forced landlords to offer discounts to gain and retain tenants.” It forecasts that 121,000 sq metres of supply is due to be delivered in Abu Dhabi this year, which is less susceptible to downward pressure because of the limited amount of supply in good malls, the population’s higher disposable income and because it is less dependent on tourist shoppers.
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