Dubai Mall opening still on track

All good things come to those who wait, Dubai Mall executives have maintained, and a few bumps in the road can only be expected. The mall was due to open last Thursday but a last-minute postponement of the highly anticipated partial opening was just the latest in a series of delays. Emaar, the mall's developer, had originally said the mall would open on Aug 28, but announced three weeks before that date that it had been pushed back to Oct 30. For many retailers, the uncertainty has been frustrating. "We bought our stock for the Aug 28 opening and we are already delayed," said Emma Millward, the brand manager for Reiss, a UK-based fashion brand. "It has a really negative impact on our business." Dubai Mall covers 1.12 million square metres, or the equivalent of 50 football fields. Of that, 548,000 sq metres is leasable retail space. Property analysts said delays in a project of the mall's scale were to be expected. "It's a very large structure and there are lots of constituent parts involved," said Nicholas Maclean, the Middle East managing director for the real estate consultancy CB Richard Ellis. "I don't think it's one component of the melting pot's fault - all those people working together have just experienced delays they did not foresee." It has been a race against the clock to get the mall ready for opening, with workers toiling away around the clock on everything from the car park entry and exit ramps, to the retail shops themselves. Mr Maclean said a lack of adequate supporting infrastructure, such as allowing smooth access, could result in small crowds and low sales. "From my observations, one of the critical factors is the infrastructure supporting it - and it is not ready yet," he said. However, for retailers looking to fill the mall, any delay can have serious financial implications. Retailers buy stock four to six months in advance, making purchasing and budgeting decisions according to the initial opening date of any shopping centre. A delay of a month can cause retailers to undersell and so suffer losses. "People should have hedged themselves just based on the sheer size of the development," said Naeem Ghafoor, the chief executive of Skyline Retail Services Consultancy. "When you go to the supplier, you say, 'the mall says August, but we feel it will be later than that so we need half the order', because it's better to sell out than to be left with your stock." Several of the city's major developments have been hit by delays, including Emaar's Burj Dubai, the tallest building in the world that is rising near Dubai Mall. The tower's completion is at least a year behind schedule. The key cause of the construction delays, analysts say, is the lack of labour and materials in relation to the high number of projects under way. About 4.25 million sq metres of mall space is being built in Dubai, including the Mall of Arabia in Dubailand, which, at 930,000 sq metres, will be bigger than the Emaar project when it opens in 2010. "The delays will affect the developers because the rents receivable are related to the operational opening day," said Mr Maclean, adding that "retailers will be impacted because they order their stock in advance for a particular season". Mr Dayal, of Easa Saleh Al Gurg, knows this all to well. "In one mall, we had our merchandise ready for a particular season and it didn't open in time," he said. "The season had gone by the time it opened and we were stuck with this stock." vsalama@thenational.ae ozaafrani@thenational.ae