Shoppers in Dubai this week will find an abundance of empty space and closed stores in addition to the Dubai Shopping Festival.
Vacancy rates in Dubai's shopping centres are at their highest levels in recent years, up to 30 per cent, according to new data from Jones Lang LaSalle, the property consultants.
Malls in Dubai typically average closer to 5 per cent to 10 per cent of vacancy, said Craig Plumb, Jones Lang LaSalle's head of research.
"Vacancy rates are higher than you would expect in a healthy market," Mr Plumb said. "There's now sufficient retail supply to accommodate the level of demand."
Dubai has one of the heaviest concentrations of mall space in the world, a recent study by Cushman & Wakefield found. Dubai offers 1,385 square metres of shopping space per 1,000 people, a higher amount than in the US and Europe, according to Cushman & Wakefield data.
Store vacancies are usually in the upper levels of the malls, and in less desired locations, said Mr Plumb. And centres with ample parking and "retailers targeting the needs of the local community" are performing better than their competitors.
"Retailers can choose better performing centres," Mr Plumb said. "There is a big difference between the better performers and the rest of the malls."
In response to the vacancies, the estimated value of space in malls declined 27 per cent last year compared with the year before. And landlords are now enticing retailers with a variety of deals, including free rent periods and lower base rates.
The best performing stores last year were "value-priced" fashion outlets, although profit levels for the luxury segment have "remained healthy", the Jones Lang LaSalle study found.
Stores offering items people buy on an every day basis should do better than high-end fashion outlets, Mr Plumb predicted.
"Community retailers will be the flavour of the month for the next few years," he said.
Existing Dubai shopping centres may be helped by a slowdown in mall construction. Last year, the only new major mall to open was the Mirdif City Centre, which added 196,000 sq metres of space to the local supply.
No new large malls are expected until 2013, when the Mall of Arabia is scheduled to open in Dubailand.
"We expect the market to absorb the [empty space] over the next two years," said Mr Plumb.