Dubai-headquartered Al-Futtaim group, a leading diversified conglomerate operating across 30 markets, has signed a memorandum of understanding (MoU) with Riyadh-based Kayannat Real Estate Company to create Saudi Arabia’s biggest shopping mall, Al Diriyah Festival City, in a landmark agreement designed to redefine the capital city’ retail landscape.
Omar Al-Futtaim, Vice Chairman, Al-Futtaim group and Fahad Al Muqbal, Managing Director, Kayannat, signed the agreement during a ceremony held in Dubai today attended by officials of the various parties involved in the project which will greatly contribute to the Kingdom’s GDP, create employment opportunities and ultimately provide Saudi consumers with a much-needed next generation super regional mall.
“With a population of 30 million Saudi Arabia is the GCC’s biggest market with a booming retail sector expected to reach a value of SR 276 billion by the end of 2014 which accounts for 17% of Saudi Arabia’s GDP,” said Omar Al-Futtaim.
“We are privileged to be able to enter into a partnership with a group of prestigious businessmen who include the franchisee of IKEA in the Kingdom, Dr Ghassan Ahmed Abdullah Al Sulaiman, in order to tap into this lucrative market and further contribute to the Kingdom’s economic development,” added Mr Omar Al-Futtaim.
Mr Fahad Al Muqbal said: “On this momentous occasion for Saudi Arabia’s retail sector it is with great pleasure that we partner with Al-Futtaim group, with its proven track record in shopping mall development and operations. Once completed, Al Diriyah Festival City will elevate Saudi consumers’ retail experience to a whole new level.”
According to the MoU Al Diriyah Festival City will have 250,000 square metres of gross leasable area (GLA) and be located at the west of Riyadh, 5kms from King Saud University and 10kms from King Abdullah Financial District. The SAR 6bn ($1.6bn) super-regional mall which will take shape in Riyadh’s Al Diriyah district will be anchored by IKEA, construction of which is expected to commence soon and completion scheduled in 12 months. A luxury 500-room hotel and serviced apartments will be another key feature of the development which has obtained all necessary building permits to move into construction.
Under the agreement, Al-Futtaim will manage all matters related to the Al Diriyah Festival City project providing investment and development management services to construct, develop, lease and operate the mall.
Bordered by the famous Wadi Hanifa and one of Riyadh’s greenest belts, the Al Diriyah Festival City site is connected to the major road arteries of the city and is considered to be the gate of the Old Diriyah Area. A number of affluent residential master planned communities are taking shape to the north of the site and are expected to significantly increase the mall’s catchment population in the years to come.
“We always plan ahead taking a long-term strategic view and this agreement will add another significant asset into our portfolio of regional malls. It gives us a footprint into the Kingdom’s retail sector and extends our network of shopping centres, which currently includes a number of operational or under-development assets across the Middle East,” said Omar Al Futtaim.
Al-Futtaim presently operates its flagship Dubai Festival City Mall which opened in 2005 and in November 2013 the group inaugurated Cairo Festival City super-regional mall anchored by IKEA Egypt and measuring 157,700 square metres of GLA. In Qatar, Al-Futtaim and its joint venture partners have completed phase one of Doha Festival City, a super-regional mall spanning a GLA of 254,000 square metres which showcases Qatar’s first IKEA. Furthermore, the group has also signed a joint venture with local governmental entities in Muscat, Oman to jointly develop the Sultanate’s largest shopping mall anchored by the country’s first IKEA store. Al-Futtaim group is also co-developing a shopping mall in Casablanca spanning 120,000 square metres of GLA. Two further regional malls are in the early planning stages.