Dubai’s next big gold and jewellery destination will open for business in the second quarter of 2020, with retailers having already made “commitments” for more than 100 of the 295 outlets. The location, right next to the existing Deira Gold Souq, takes up the stretch from the Shindaga Tunnel to the edge of Hyatt Regency.
But the developer behind the project insists on one point — “This is not the new Gold Souq but an extension of the old,” said Issam Galadari, CEO of Ithra Dubai, the real estate division of Investment Corporation of Dubai (ICD). “We are in no way disconnecting ourselves from the existing Souq. Instead, the effort is to bring about more value to the entire area and for the gold retail sector.
It was October last year that Ithra unveiled the extension project to the local gold trade and other potential tenants. Lease rates for the new outlets will “start from Dh700 a square foot”, and jewellery retailers can book from a minimum of three years. According to Galadari, the rental rates are in sync with market trends and also match the level of services Ithra will provide that entire cluster.
At the existing Gold Souq, key money has been a fact of life for decades now. During times of peak demand for space, it could be as high as Dh5 million to Dh6 million for a single outlet, said Anil Dhanak, Managing Director of Kanz Jewels. But in recent times, it has come down significantly, and even been nonexistent on some of the latest deals.
“As for current rents in the old Souq, it could be Dh1 million for a single store in a prominent spot. But there are some buildings where rents have hardly changed all this while, and still go for Dh11,000 a year.
“There is definitely a good deal of interest in the Souq extension and the possibility of attracting a new generation of gold buyers in an updated retail environment.” (Kanz has expressed interest in three potential locations at the extension, for store sizes of 1,000-1,500 square feet apiece.)
