Has Dubai’s F&B market ever been stronger?

CBRE Insights | Retail

06 Jun 2022

By Anthony Spary


Subscribe for more Insights

Subscribe now

If we cast our minds back two years, we were amid a lockdown, the quiet summer period fast approaching and a level of uncertainty that I had never experienced in my eight years in Dubai. When you consider the subdued nature of the Retail market before the pandemic, with the increasing vacancy and reduced demand across almost every category, who could have predicted what was to become of the Dubai Retail landscape.
Like me, many of you would have had confidence in the Dubai market rebounding quickly after the pandemic, just like it did after the GFC in 2008. However, I challenge anyone to have envisaged what we’re seeing today in terms of growth, demand, and buoyancy across a market sector that was stuttering into a supply and demand crisis.

While I’m not going to focus on every category of retail, many of which today have surpassed pre-pandemic sales and footfall, this piece focuses specifically on Dubai’s F&B market and the extraordinary growth and potential that we’re currently seeing in this space.


The agility of Dubai’s large developers

While many operators worldwide were crippled by the effects of the pandemic, the flexibility shown by the large institutional developers across Dubai was remarkable. This adaptability allowed them to provide attractive propositions to, primarily, existing groups in the market and package up bespoke deals to attract these trusted operators and brands to their schemes. We have seen this trend play out for new to market properties such as Nakheel’s Palm West Beach, repositioned schemes such as La Mer or Bluewaters, and existing schemes such as Mall of the Emirates or The Dubai Mall.

A change in approach was something retailers had been lobbying for many years, and the pandemic was the key to paving the way for this change in mindset and greater flexibility. This then opened up a wealth of opportunities to retailers, encouraging them to further commit to the Dubai retail landscape. This pivot in the market, combined with the Dubai government’s laudable handling of the pandemic and reopening of the city, underpinned today’s buoyant market.


Beach clubs are booming

There has been a constant stream of new openings across the F&B scene over the last 12-18 months; noteworthy concepts include the long-awaited Sushi Samba as well EL&N, Twiggy, Pavilion, and Cipriani Dolci. This, however, is just the tip of the iceberg, with an ever-growing number of operators and brands either recently securing space, in the process of fitting out premises, or waiting for developers to hand over units.We’ve also seen a considerable influx of beach club concepts. With Nakheel’s recently announced The Club opening at Palm West Beach, which will be home to nine new beach clubs alone, and the redevelopment of La Mer, this sub-sector is booming with no slowdown in sight. CBRE is currently exclusively acting on behalf of five beach club concepts worldwide, including renowned brands, which shows the current strength of this sub-market.

Not without its challenges

If there was a setback in this sector due to the pandemic, it was from new to market brands placing their expansion plans on hold while focusing on their core/home markets. Given that these operators were not familiar with the intricacies of Dubai’s market, they understandably took a more cautious approach than the existing players.

However, I commend and am somewhat in awe of the approach taken by some of the local/existing major F&B operators and the expansion plans that they now have underway.

Some noteworthy mentions include Sunset Hospitality, with a ream of recent openings and an exciting pipeline, and Solutions Leisure, who is creating the UAE’s largest F&B outlet comprising of a 100,000 sq. ft. space in Festival City. These expansions show enormous confidence in Dubai’s current and future market potential.

Bright future ahead for F&B

It’s not just the larger groups that have seen and taken opportunities over the last couple of years. It’s great to see expansions from some of Dubai’s homegrown concepts, such as Pickl, who appears to be rapidly growing its empire both at home and abroad, as are Jailbird, Akiba Dori, and Brass Monkeys. Given this backdrop, many are looking at Dubai as a long-term play, which will only improve the confidence in the market, attract further foreign investment, and continue to diversify the already extensive F&B scene across Dubai.

We, therefore, find ourselves in the extraordinary position of struggling to find good quality space for our F&B clients’ requirements, an unthinkable scenario just prior to the pandemic. And not only that, but we are also rapidly returning to the “good old days” of units being leased before they make it to the market. I don’t doubt that the dreaded, with my retailer hat on, of course, waitlists in Dubai’s signature assets are months, if not weeks away, and indeed in certain assets and categories have already been enacted.

From a CBRE perspective, our current pipeline of F&B requirements is the strongest on record by some way, and this is in addition to the plethora of deals we have already concluded over the last 12-18 months.                                     

So, it appears that the future isn’t just bright for the F&B sector in Dubai; more like triumphant.

Let’s hope that there’s enough space to go around for us all for the foreseeable future and that growth is sustainable for all to enjoy for many years to come.

Looking for more insights?

Stay up to date on relevant trends and the latest research.