Emaar Malls See 10% Footfall Drop Amid Iran Conflict, Founder Alabbar Reports

Mohamed Alabbar, founder of Emaar, revealed on Thursday that Emaar 's malls have experienced a 10 percent decrease in footfall and retail sales, with hotel occupancy also declining significantly. This downturn is attributed to the ongoing Iran war, which is impacting tourism and consumer spending in Dubai. Mr. Alabbar stated at the Bloomberg Invest event in Dubai that while the company's mall business traffic is down by 10 percent, it had previously seen 10 percent annual growth for the past five years. He did not specify the affected malls or the timeframe for this decline. Retail sales have also reportedly fallen by approximately 10 percent, mirroring the annual growth rate seen in recent years. The hospitality sector has not been spared, with occupancy rates dropping from 80 percent to around 65 percent.

Despite these challenges, Emaar remains committed to its development activities, with construction progressing on schedule and projects being delivered ahead of time. Mr. Alabbar noted that development contractors are on track, material procurement is proceeding, and cost increases of about 5 percent are considered acceptable. However, the company is postponing the tendering of a major tower project until the regional situation stabilizes. Emaar Properties had previously announced a significant Dh200 billion ($55 billion) megaproject in Dubai in June, designed to accommodate approximately 150,000 residents and featuring a vast array of residential, commercial, and hospitality facilities across over 4.5 million square metres.

Mr. Alabbar emphasized that the resolution of the conflict between Donald Trump and the Iranian leadership is crucial for market recovery. He anticipates that if a resolution occurs within a month, the market could rebound within 12 months. Looking ahead, Alabbar is optimistic about India as a key growth market for Emaar over the next five years, complementing its existing projects in cities like Gurugram and Mohali. The company also plans to continue its expansion in the Middle East, including the UAE, Egypt, and Syria, with Eagle Hills, Mr. Alabbar's developer firm, undertaking significant projects in Syria under an agreement with the Syrian government.

In parallel, Damac Properties founder and chairman Hussain Sajwani discussed his company's global expansion, particularly in the UK and Australia, focusing on new data center projects. Following a $20 billion investment in US data centers last year, Damac aims to reach 10 gigawatts of capacity by the end of next year, concentrating on large data centers (100MW and above) in densely populated regions like the US, EU, and Asia. Damac also holds investments in the AI firm Anthropic, which Mr. Sajwani described as highly profitable, generating substantial returns in less than two years. He highlighted Anthropic's significant revenue figures and its potential for a record-breaking IPO. Mr. Sajwani also commented on Nvidia's CEO Jensen Huang, stating that his departure would be a significant global loss.