Merex’s revival of ‘challenging’ City Walk and La Mer

• Merex reveals revival plans
• City Walk 98% occupied
• La Mer relaunching as J1 Beach

Merex Investment is redeveloping its lifestyle beachfront destination La Mer and using its successful transformation of City Walk in Dubai as a benchmark for the revival of its failing assets.

La Mer is to be renamed J1 Beach, with 13 new dining and club venues due to open in September 2024.

Occupancy rates at City Walk, which the company’s chief called its “most challenging asset”, went from 41 percent between 2017 and 2020 to 98 percent last year as a result of a “lengthy process of changing the look and feel of the destination”.

Originally launched as a fashion high street, City Walk failed to perform as a result of factors including weather conditions – given most of it is outdoors – and the wrong strategy and retail mix, Merex’s CEO says.

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“The property was never big enough to be a fashion hub,” says Shahram Shamsaee. “You need a certain number of anchors and a certain number of units to put something together which has that sort of gravitas. Let’s be honest.”

Fashion high streets such as Oxford Street in London or the Champs-Élysées in Paris are located in areas with high residential population, good public transport connectivity and in relatively older parts of the city, according to Shamsaee. This was not the case with City Walk. 

Covid-19 offered Merex a “mental holiday” to transform the destination. 

Merex

“Because it’s recently developed, we didn’t have the option of completely changing it. We had to look within the parameters of what we had and understand why it is not performing at the level we’d like it to be,” Shamsaee says.

A huge part of the transformation was rationalising the number of units they had, he says. The second change was shifting the offerings to cater to destination visitors rather than impulse shoppers. 

City Walk is now home to more than 250 fashion, fitness, wellness, food and beverage, professional service and automotive brands that appeal to younger Western expat residents – half of the visitors are below the age of 30, and 22 percent are Westerners that live in Dubai. 

In 2022 City Walk diversified into commercial real estate by signing a lease for Talabat’s largest office, taking up 14,000 sq m in two buildings. 

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“Funnily enough, we have some of the highest demand for additional commercial space, which we don’t have unfortunately,” Shamsaee says.

“There is an undersupply of commercial space in certain parts of the city and there’s a lot of appetite if you have the space.

“These are MNCs [multinational corporations] and blue chip companies that are looking for multiple floors and 100,000 to 200,000 sq ft spaces. This gives us a captive audience during the day, which transitions into the evening, which is when we usually get higher traffic.” 

At 98 percent capacity, and with traffic and sales in the first two months of 2024 up by 34 percent and 12 percent respectively, City Walk’s challenge now is shortage, as demand for retail and commercial space grows. 

Watch the video to learn more and get a preview of J1 Beach.