Dubai-based Al Futtaim Group said on Sunday it has signed a memorandum of understanding to create Saudi Arabia’s biggest shopping mall.
The deal with Riyadh-based Kayannat Real Estate Company will lead to the establishment of Al Diriyah Festival City, which will have 250,000 square meters of gross leasable area and be located to the west of the capital city.The SAR6bn ($1.6bn) super-regional mall will be anchored by IKEA, construction of which is expected to start soon and completion scheduled in 12 months.
A luxury 500-room hotel and serviced apartments will also feature in the development which has obtained all necessary building permits to move into construction, a statement said.
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.
Omar Al Futtaim, vice chairman, Al Futtaim Group, said: “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 SAR276 billion by the end of 2014 which accounts for 17 percent of Saudi Arabia’s GDP.
“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.”
Fahad Al Muqbal, managing director, Kayannat, added: “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.”
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.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.
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