Metro to let last of its shops

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By Armina Ligaya  www.thenational.ae

The final retail shops along the Dubai Metro have been put up for tender, the emirate’s Roads and Transport Authority (RTA) says.

Dubai metro
Dubai metro

The total of about 20 sites on offer are the last of the 235 shops, encompassing roughly 11,000 square metres, on the Metro, Peyman Younes, the director of marketing and corporate communications at the RTA, said yesterday.

The RTA expects demand to be brisk for the outlets, which are located mainly in City Centre, Al Rigga, Union Square, Khalid Bin Al Waleed, Burj Dubai and Nakheel stations.

“Once [the Metro] opened, a lot of people were interested again,” he said.

“And the numbers are fantastic, with 50,000, 60,000 people [using the train] per day. It’s a lot better than people thought, by any means.”

The Metro opened on September 9 with 10 of 29 stations on the Red Line in operation. More than 110,000 people, which represents nearly 10 per cent of Dubai’s population, used the Metro in its first two days of operation, the RTA said.

The remaining Red Line stations are expected to be open by February of next year.

The RTA began the bidding for Metro retail space last January and more than 500 retailers responded, some offering three times the minimum bid. More than 90 per cent of the outlets were awarded by May.

Most of the outlets had been leased and a “few” of the shops had opened, Mr Younes said. He did not offer figures.

The Metro carries between 45,000 and 47,000 passengers a day, Mr Younes said. It has a capacity of 23,000 people an hour in each direction.

Some retailers, however, reconsidered their bids for retail space on the Metro as rents fell for locations in malls and along high streets in Dubai.

The convenience store chain Last Minute won its bid for 28 outlets on the Metro, but withdrew from all 18 of the locations on the Red Line in August when it could not get a written guarantee when the stations would open.

The company, based in Dubai, also cited high retail rents and having to submit postdated cheques for all 28 of the units for two years as deterrents.

However, it kept its outlets on the Metro’s Green Line, which is expected to open next year.

Another convenience store chain, 24 Seven, also withdrew its bids because the cost of retail shops on the ground floor of office and residential buildings in Dubai had fallen by as much as 30 per cent, said Martin Pointon, the operational director.

Bunny Malik, the general manager in the UAE for the Asian restaurant chain Chowking, which has opened an outlet at Dubai International Financial Centre station, said it had been faring well. While eating is not allowed on the Metro, he estimated half of the commuters who used the station were on their way to the office and brought the meals with them.

“The market is a little bit dull, but it’s going to improve,” he said. “It is performing to what we expected.”

Mr Malik has signed up for shops at 12 stations and had been looking to acquire six more.

He said he had become hesitant because the outlets were tendered in batches and the shops were often too close to each other along the line and competed for sales.

“That becomes very difficult to operate,” he said.

Prashand Shiroor, the senior manager of operations at Asia Exchange, the currency exchange and transfer service which has signed on for one outlet at Rashidiya station, said his company was considering a new bid.

“If you look internationally, public transport is a cost effective and an ideal way of travelling across the city, and it is used by a lot of tourists and commuters. Over here, that will be the situation in the longer term.

“Once it catches the public frenzy, the network will be used a lot.”

The deadline for bids is 10am on December 17.

aligaya@thenational.ae