Opening of Cairo project delayed until 2015; MAF also eyes Abu Dhabi, Riyadh and Eastern Europe
Construction of Dubai developer Majid Al Futtaim (MAF) Properties' Mall of Egypt will finally begin next month, but will be a year behind schedule by the time it is expected to open.
Despite political and social unrest, MAF Holding CEO Iyad Malas on Tuesday said he was confident in the Cairo market and the company would persist with the project.
Malas said sales in the company’s two existing malls in Egypt, in Alexandria and Maadi, rose 24 percent last year compared to 2011, during the height of political disturbances.
Egypt was trying to attract new investment and entice those who left the country to return, he said.
MAF Properties had secured US$450m worth of financing to fund Mall of Egypt from a consortium of banks led by National Bank of Egypt and Banque Misr.
“There is clearly support for Egypt... internationally,” Malas said. “They have to focus on the key issues with unemployment; all that needs investment in growth.”
The Mall of Egypt will be built on 399,400 sqm of land outside Cairo and will include North Africa’s first manmade indoor ski resort, similar to MAF Properties’ Ski Dubai in Mall of the Emirates, about 380 retail outlets, a Carrefour hypermarket, 17-screen cinema complex and an amusement park.
The US$400m construction contract has been awarded to a 50/50 joint venture between Orascom Construction and BESIX Group.
The project will represent a total investment of EGP4.9bn (US$800m) and will lead to the creation of 9,000 jobs during the construction phase and 7,000 once the mall has opened.
However, the mall is now not expected to open until late 2015, about a year beyond its original opening date of October 2014.
Malas also said MAF Properties was considering entering the Abu Dhabi and Riyadh markets and was already scouting for potential development locations.
“[We’re] looking at building potential shopping malls in both those cities,” Malas said. “We’re looking for land at the right price, at the right location, etc.” Such malls would be at least 150,000 sqm, Malas said.
The company may also expand the hypermarket Carrefour, of which MAF Retail owns a 75 percent interest, into Abu Dhabi. “That’s clearly a good option,” Malas said.
MAF Properties said it is also planning to expand into Georgia, Kazakhstan, Armenia and Azerbaijan in the near future, starting with Georgia as early as this year.
In 2013, MAF Properties is also due to open its first mall in Lebanon in April. It is already fully tenanted.
Malas said a second mall was planned for the new Beirut Waterfront project, with construction to possibly start this year.
The new shopping mall plans were revealed during an announcement of MAF Holding's 2012 full-year results today.
The company, the largest private shopping mall developer in the Middle East, said its revenue grew 10 percent last year compared to 2011, to AED21.6bn.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 7 percent to AED3bn. Excluding currency depreciation in Iran, EBITDA grew 9 percent.
The company said its balance sheet remained strong with total assets valued at more than AED38bn, with AED7bn debt.
MAF Properties contributed about 65 percent of MAF Holding’s EBITDA, with revenue increasing 15 percent to AED3.2bn. The company’s malls saw about 147m visitors during 2012.
MAF Retail, which operates the Carrefour franchise, saw 8 percent growth in revenue, rising to AED17.8bn, contributing 31 percent of the group’s EBITDA.
MAF Ventures, which operates the group’s leisure and entertainment facilities, increased its revenue 11 percent to AED806m.