Majid Al Futtaim to invest $3.7 billion to build two malls in Riyadh
Dubai-based retail and leisure group Majid Al Futtaim announced on Monday (February 8) that it would invest SAR14 billion to build two malls in Saudi Arabia’s capital Riyadh.
The Mall of Saudi spans a total land area of more than 866,000 sqm will include shops, restaurants, entertainment venues, offices, hotels and residential units.
Majid Al Futtaim says the mall would be the Kingdom’s largest and will host the first ski slope in the country.
The first phase of development at Mall of Saudi will start in mid-2017 and is projected to be completed by 2022.
The second mall – the 100,000 sqm City Centre Ishbiliyah in the eastern part of the capital – will open in 2018.
Saudi’s first “City Centre”, a popular Majid Al Futtaim brand with 13 malls so named in the region, will include 250 shops and a hypermarket.
The group expects that the new malls will create more than 10,000 direct and indirect jobs in the capital.
With the two new developments, there will be more than 20 malls across the MENA region that are owned and operated by the privately held company, which last week reported an eight per cent increase in annual revenue.
The announcement comes at a time when the latest figures indicate that several real estate projects in Saudi Arabia, particularly in Riyadh, were being delayed or scaled back as lower oil prices led to a cut in subsidies and reduced government spending, which, in turn, adversely affected the country’s economy.
JLL, the real estate investment and advisory firm, said in its annual review of Saudi Arabia’s realty market for 2015 that it has also seen shifting demand from property sales to rentals as residential transactions dropped by five percent last year.
On January 27, JLL, the real estate investment and advisory firm, in its Saudi Arabian Real Estate Market for 2015 review, said it was expecting a significant amount of retail space to enter the market in Riyadh over the next two years.
This is expected to increase vacancy rates and decrease rents as competition in the market increases, the consultancy remarked.