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Tue 31 Mar 2015 04:58 PM

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Abu Dhabi's TDIC said to delay fundraising plans for shopping mall

Tourism master developer had been in talks with banks late last year to raise the cash for The District

Abu Dhabi's TDIC said to delay fundraising plans for shopping mall
The District Mall is being built on Saadiyat Island

Tourism Development & Investment Co (TDIC) has delayed fundraising plans to build Abu Dhabi's largest shopping mall in collaboration with a unit of French luxury goods firm LVMH, three sources aware of the matter told Reuters.

The move by the Abu Dhabi state-owned investment fund, coupled with management changes at the joint venture and lower oil prices hitting spending in the Gulf region, casts doubt on whether this key part of the emirate's infrastructure plans will go ahead.

TDIC declined to comment on the project or its funding plan.

TDIC had been in talks with banks late last year to raise the cash for The District, with a view to finalising a deal by the end of January, allowing building work to start by March or April, a company source told Reuters in December.

But three sources told Reuters on Tuesday that the funding had been delayed.

They cited recent changes in the senior leadership as one of the reasons for the stalling. TDIC's chief financial officer, Shaun O'Connor, left the firm in December and has yet to be replaced. Deputy finance head Matt Matharu is serving as acting chief financial officer.

O'Connor had been on the board of the joint venture overseeing the project. The joint venture is made up of TDIC and L Real Estate, a global property development and investment fund sponsored by LVMH.

Two other senior leadership changes in the past year at TDIC involved Ali Majid Al Mansouri taking over as chairman in November, and Ali Al Hammadi being appointed chief executive in July in place of James Pringle.

Two of the sources suggested uncertainty about whether the project would go ahead at all, although a third said the company was continuing to work on both the mall and the financing.

Situated on Saadiyat island, an area of the city planned to accommodate the local branches of the Louvre and the Guggenheim, the mall is scheduled to hold more than 550 units across 269,000 square metres of leasable space, according to TDIC's website.

Creating cultural and leisure attractions forms one part of Abu Dhabi's plan to diversify its economy away from a reliance on oil and gas, the single-biggest contributors to revenues.

A fourth source questioned whether there was sufficient demand for the project, given its close proximity to three other large malls - including Yas Mall, currently the largest mall in the emirate at 235,000 square metres, which was opened in November.

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