Dubai F&B sector will coast through uncertainty, says CEO

Supplied

• Merex Investment redeveloping La Mer restaurants and shops
• Prime beachfront plots in short supply in Dubai
• Market remains robust, says Merex chief

The food and beverage industry in Dubai can withstand economic uncertainty, according to the CEO of Merex Investment, developer of La Mer, a beachfront attraction with more than 100 restaurants, cafes and shops.

It had been feared that further hikes in interest rates by the US Federal Reserve may lead to residents of countries with weaker currencies avoiding or postponing foreign trips – namely to Dubai.

The Fed raised interest rates by a quarter of a percentage point earlier this month, which was mirrored by the central banks of most GCC countries, whose currencies are pegged to the dollar.

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“This could imply lower tourism spend from other global tourists,” said Vijay Valecha, chief investment officer at Century Financial.

However, Shahram Shamsaee, CEO of Merex Investment, told AGBI: “You always have your peaks and troughs but the market here is robust. 

“Consumption in Dubai is incredible. We have a vast inflow of new residents into Dubai so you’ve got a population build-up.”

Dubai had 14.36 million international overnight visitors in 2022, a year-on-year increase of 97 percent, according to data published last month by the Department of Economy and Tourism (DET).

The inaugural Dubai Gastronomy Industry Report, published in September last year by the DET, revealed there were 13,000 restaurants and cafes operating in the emirate.

The residents survey carried out as part of the report showed more than 55 percent saw Dubai as the number one global gastronomy hub ahead of New York (8 percent) and London (7 percent).

“Dubai is today a benchmark for best in class,” said Shamsaee. “It’s like competing in the Olympics. It’s as competitive as it gets.

“So there needs to be a medium to long term plan to it – to establish something that over the next 20 years becomes one of the premium destinations.”

Merex Investment, which was formed in 2020 and counts Dubai Holding and Brookfield as its two major shareholders, is currently redeveloping La Mer in Dubai, which only opened its doors to the public in 2018.

La Mer is a tourist attraction with 130-plus restaurants, cafes and shops, a cinema and the Laguna Waterpark.

“We felt like we needed to do a major redevelopment of that site,” Shamsaee said.

“You don’t go looking for putting additional capital into developments when you’ve already invested heavily in it, but sometimes it’s probably the bravest decision.”

Its J1 Beach project at La Mer, which will feature three beach clubs and 10 fine dining restaurants, is due to open in the fourth quarter of this year.

Shamsaee did not reveal the cost of the redevelopment. 

Prime beachfront plots across Dubai are in short supply, according to Metropolitan Premium Properties’ head of institutional sales, Ahmed Abou El Naga. 

“These sites are scarce and any prime beachfront plot – or even waterfront, like those in inland neighbourhoods such as Business Bay and along the Dubai Water Canal – are in demand among investors,” he said in December.

“If you look at Google Earth you will see that most of the beachfront areas in Dubai are already developed.”