DUBAI - Majid Al Futtaim Properties, the owner of Dubai’s Deira City Centre and Mall of the Emirates, is investing $4 billion in new projects in the Middle East and North Africa over the next five years as it seeks to double its portfolio, unfazed by an economic slowdown.
The company, which aims to be the largest developer and manager of shopping malls in the Arab world, is working on 14 new projects in several countries, including the UAE, Egypt, Syria, Lebanon and Oman.
"Our five-year plan is to double the portfolio from 10 malls to 20 malls in simple terms and double the floor space," Majid Al Futtaim Properties CEO Peter Walichnowski told Maktoob Business in an interview on Tuesday.
He said estimated investment in new projects will be $4 billion.
The company is opening one of the UAE’s biggest shopping malls in March next year in the Mirdif area of Dubai, taking the retail space under its management to 1.2 million square metres from 750,000 square metres currently.
By 2015, Majid Al Futtaim aims to grow its gross leasable area (GLA) to 2.2 million square metres.
Walichnowski said Abu Dhabi and Saudi Arabia are among the new locations where the company is looking for land.
“We are talking in Abu Dhabi ... We are in discussions on a number of sites in Jeddah and Riyadh,” he said, adding that these will be large destination malls with hundreds of retail stores and leisure facilities.
With hot temperature outdoors, large shopping malls in Gulf cities try to attract residents not only for shopping but also other activities.
Long-term plans also include potential projects in Iran, Iraq and Afghanistan, but the company does not plan to enter India because the country already has “enough people chasing retail”.
At present the UAE accounts for 70 percent of the company’s revenues, but that ratio will decline to 50 percent in five years when overseas projects under development are completed, Walichnowski said.
“Mirdif will have a big impact because it is a very big mall so in the short-term our revenue will be 80 percent from the UAE. (But) 50-50 is the kind of long-term balancing target,” he said.
Mirdif City Centre will be a destination mall with a range of entertainment and leisure facilities.
It will have about 400 stores with 6,000 people working at the mall when it is fully completed in March next year.
Asked about the impact of the economic slowdown, Walichnowski said the group's shopping malls in Dubai have not seen a decline in footfall, but average consumer spending has declined as tourist numbers drop in the recession.
Dubai’s retail sales have declined more than 20 percent as consumers curb spending in tough economic times.
High value items have been hit especially hard, with jewellery retail in the emirate, known as the "City of Gold", dropping 50 percent this year compared with last year.
Investment bank EFG Hermes forecast earlier this year that Dubai’s population could decline by 17 percent amid jobs losses, particularly in the collapsed real estate sector.
Walichnowski said footfall at Majid Al Futtaim malls shows that there is no “evidence that there has been mass shrinkage of people living in Dubai”.
The malls in Egypt have similarly performed well, he said.
“Egypt has been a very good market for our first two malls. It has not suffered from recession as other countries have. We have seen foot fall and sales go up this year and we have got some large plans to continue investing in Egypt,” he said.
The company is working on Mall of Egypt, which will offer GLA of 342,000 square metres to become the country’s biggest mall.