Majid Al Futtaim Holding, the company behind some of the Middle East’s biggest malls, plans to invest more than Dh3 billion across its Dubai business over the next five years.
The plans, unveiled yesterday, came as the company announced a 10 per cent increase in annual sales to Dh23bn
Included in its investment plans is the renovation of Dubai’s Mall of the Emirates and Deira City Centre mall, together with two of the company’s existing hotels.
MAF also plans to build two hotel developments, along with four Carrefour supermarkets and two hypermarkets, as well as a 14-screen cinema complex.
The company is also considering the construction of a new community mall in the emirate, declining to give further details.
The investment plan is designed to support Dubai’s 2020 tourism vision, which targets 20 million visitors to the emirate in 2020, up from 10 million in 2012.
The vision, outlined by Dubai’s Department of Tourism and Commerce Marketing (DTCM) last May, requires a doubling of hotel rooms in the emirate to about 160,000 by 2020.
DTCM also plans to enhance Dubai’s status as a destination for families and business tourism, and to boost the emirate’s global reputation for events such as the Dubai Shopping Festival and Dubai Summer Surprise.
MAF is well placed to benefit from DTCM’s plans, as well as Expo 2020 in Dubai, according to Tommy Trask, a credit analyst with Standard & Poor’s.
“Their existing assets will benefit from Dubai’s population growth and the growth in tourist numbers between now and then,” said Mr Trask. “The fact that they already have three major malls in Dubai in the run-up to 2020 is a very positive thing.”
MAF Holding had total assets of more than Dh39bn at the end of the year, with net debt of about Dh7bn.
“This was another very good year for the company,” said Iyad Malas, MAF’s chief executive, “We have not only delivered robust business results but have also united our companies under one umbrella corporate brand – Majid Al Futtaim – as we embark on the next chapter of our expansion plans.”
Revenue at the group’s properties division increased by 13 per cent to Dh3.5bn in 2013, while its retail business reported 9 per cent growth in revenue to Dh18.7bn for the year.
The group’s 12 malls welcomed 157 million visitors during 2013, a year-on-year increase of 7 per cent, while revenue per available room at the company’s 11 hotels increased 20 per cent.
In April the company opened its first mall in the Levant, Beirut City Centre.
The retail business added eight hypermarkets and 10 supermarkets during the year, expanding its portfolio to 56 hypermarkets and 53 supermarkets in 12 countries across the Middle East, North Africa and Central Asia.
“Future growth in the Middle East and North Africa will be driven by regional large-scale expansion plans for our portfolios in Egypt in addition to new malls envisaged in the kingdom of Saudi Arabia and Oman, and residential projects in Lebanon,” said Mr Malas.
The company is well placed to go to the market to raise additional funding for its expansion plans, said Mr Trask.
“They have a strong starting point in terms of their balance sheet, so they have the capacity to pursue these projects,” he said. “We think they’ll be able to maintain a stable credit position.”
jeverington@thenational.ae
