The opening of Ski Dubai in 2005 was a turning point for the Middle East. The construction of an ice cold winter resort in the middle of the desert meant Dubai had conquered the unconquerable, and there was no stopping the region’s most ambitious developers from then on. Indeed, when Saudi Arabia said recently it planned to build the world’s first underwater mosque, it came as no surprise to expatriates and those who have visited the Gulf states before, many of whom were already familiar with the region’s love of innovative ideas.
UAE-based developer Majid Al Futtaim (MAF) Holding, the company behind Ski Dubai and Mall of the Emirates, has continued to profit from its wintry investment ever since. Not only does the company now have a reputation as an expert mall and resort builder, but it has also enjoyed a healthy and regular income from the retail side of the business. Today, it is eyeing a whole host of shopping centres and novel entertainment concepts across the Middle East and Africa, quite possibly including more ski resorts in the Arab world’s biggest markets.
“We’re looking at around ten or eleven malls in the next five to seven years,” says Peter Walichnowski, head of Majid Al Futtaim (MAF) Properties, from the MAF headquarters in Dubai. Sitting next to him is Iyad Malas, the CEO of MAF Holding. He explains how MAF Properties is the division responsible for building the company’s malls, hotels and mixed-use developments, but in truth all aspects of the business including MAF Ventures and MAF Retail, have their part to play. Walichnowski adds: “We’re not only concentrating on very large malls like the Mall of the Emirates; we’re also looking at neighbourhood and community malls.”
Certainly the concept of neighbourhood shopping is becoming more popular in the region, with several rival retail conglomerates announcing similar plans. According to Walichnowski, a neighbourhood mall has approximately 20 shops whilst a community mall will have around 100.
“Over the next few years there is a plan to potentially, subject to finding the right land, at the right price and in the right place, spend around about AED3.5bn a year over the next two to three years,” says Malas. “Neighbourhood investments are small investments, between AED70 and AED100m each, so we can certainly do a number of those without a significant increase in our capital requirements.”
The final outcome will of course depend on timing and availability of land; the company could have five super regional malls or 50 smaller ones. The main aim is to double the size of the company within the next decade. Some developments are already in the pipeline, the rest are undecided. In large and densely populated markets like Saudi Arabia and Egypt, MAF executives are looking at building super regional malls, whilst in lesser markets plans are for smaller centres. In Abu Dhabi, the company is currently looking for land to build the emirate’s first major shopping centre.
“We are having discussions with several potential sites,” says Walichnowski. “We’re keen to do something in Abu Dhabi but we have to take our time because the people we’re talking to have their own expectations on land price, their own programme, and what they want to do with the land. Some land is too small for what we want, so it all takes time. Our target is to have [the site] tied up by the end of the year.”
Opportunities in Saudi Arabia and Egypt are also red hot, he says.
“Saudi is where we believe that the market is right for us to go in and build a number of malls, particularly in Riyadh. That is where we’re likely to see the first projects announced. We would certainly want to secure at least one regional mall or super-regional mall, and on the back of that we would look at some smaller malls.”
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