Majid Al Futtaim plans to aggressively expand across the Middle East and North Africa, doubling the number of major malls it operates by the end of the decade.
Majid Al Futtaim set to double mega malls
Majid Al Futtaim plans to double its portfolio of major malls across the region by the end of the decade with a US$2 billion (Dh7.3bn) funding programme in place.
The developer behind the country's City Centre brand wants to open as many as 10 malls in five years, with a potential investment of several billion dirhams.
Last week, Majid Al Futtaim (MAF) opened its 11th mall, Fujairah City Centre, and the developer is seeking land in Abu Dhabi for a major shopping centre but has yet to find a suitable plot.
"I think to put it into context, our plan is to double the size of the company over the next five to seven years to go from 10 malls to 20 in that period," said Peter Walichnowski, the chief executive of MAF Properties, the company's malls division. He was speaking at the opening of the Fujairah mall. "We want to be represented across the Middle East and North Africa."
MAF has a total retail area of more than 800,000 square metres across the region. It has six malls in the UAE, including Dubai's Mall of the Emirates, two in Egypt, two in Oman and one in Bahrain.
The Fujairah mall cost more than Dh400 million to build, while MAF said last month that an Abu Dhabi mall would cost about Dh3bn.
"If you say 'do you have interest in Abu Dhabi?', yes because we are an Emirati company and Abu Dhabi is an important emirate and we would like a shopping mall in Abu Dhabi," said Mr Walichnowski. "But 'when' is a difficult question to answer.
"A strategic objective is to have a mall in Abu Dhabi. Hopefully that will be in the next five to seven years."
Each of MAF's malls has a Carrefour hypermarket as a tenant because the brand is operated by the developer across the Middle East in a joint-venture agreement with the French retail giant.
Developers and retailers based in the UAE are rapidly expanding the number of stores they operate and are investing in new malls and mall extensions.
Billions of dirhams are set to be spent over the next three years on retail expansion in the UAE as well as the wider Gulf.
Already, Dubai has the largest mall space per person in Mena, followed by Abu Dhabi.
Emaar, the region's biggest developer, and Nakheel, have both announced investments this year worth millions of dirhams in new retail infrastructure.
A total of 260,000 sq metres of retail space is expected to be completed this year in Abu Dhabi on top of 1.67 million sq metres currently available in the capital, according to the property consultancy Jones Lang LaSalle.
"We are prioritising the UAE, then GCC, Egypt and Levant. After the UAE, our key strategic market is Saudi Arabia, where we currently don't have any malls," said Mr Walichnowski. He added that the developer could build four or five malls in Saudi Arabia over the next five to seven years.
"In Saudi, we would want to open several malls in Riyadh because of the size of the city," said Mr Walichnowski.
MAF issued a $400m sukuk at the end of January and has a $2bn bond programme in place to further tap the debt market for cash.
The developer is scheduled to open Beirut City Centre next February and is looking at two other projects in Lebanon. Mr Walichnowski also said MAF could build a total of five to 10 malls in Egypt.
"It's such a big country," he said. "Of course, what's happened with the Arab Spring has potentially slowed down short-term economic growth, but we are very optimistic about Egypt that once it gets through this consolidation period, the economy will pick up again and they will be even more demand for shopping malls."