Dubai: Majid Al Futtaim (MAF) Properties has awarded a $400 million construction contract for Mall of Egypt, the Cairo shopping mall with North Africa’s first indoor ski mountain, and expects building to begin by the end of 2012, the company announced yesterday.
Analysts say the project and other recent announcements by major international companies indicate the return of foreign investment into Egypt after the stabilisation of a new government.
The shopping mall, an $800 million project announced almost two years ago, is scheduled to be completed in June 2015, pending approval for the final building permit that it expects by the end of the year, MAF Properties said in a statement.
Construction of the mall was awarded to a 50-50 joint venture between Orascom Construction and Besix Group, the company said.
The Mall will be built on 399,400 sq. metres of land in Sixth of October City on the outskirts of Cairo with 162,500 sq. metres of gross leasable area.
It will house about 380 shops, a Carrefour hypermarket, an indoor Ski Park, 17-screen cinema complex and an amusement park. The project is expected to generate 9,000 jobs during the construction phase and employ 7,000 when the mall opens, MAF Properties said.
“Egypt’s strong economic fundamentals, such as its young and growing population, make it an attractive growth market,” Peter Walichnowski, chief executive of MAF Properties said in a statement, adding that they are committed to investing in the country’s long-term economic growth.
Analysts say the project is one of several foreign transactions that have trickled into Egypt, indicating a revival in confidence of Egypt’s economic recovery.
“For sure the news today is another positive indicator for foreign investment in Egypt though this is not really the first announcement [of the kind]. We have already seen a few transactions of mergers and aquisitions from foreign investors in the health, food and financials,” Mohammad Abu Basha, an economist at EFG-Hermes in Cairo, told Gulf News.
Recently, Qatar announced it will inject $18 billion worth of investments into Egypt over the next five years.
The new Egyptian government is giving “extensive support” to private investors, following various land disputes between some foreign investors and the government, Abu Basha said.
Asked about their confidence in the retail market and expected lease rates at the mall, Walichnowski said in an email to Gulf News: “Egypt possesses favourable demographics and strong retail demand. We have received strong support from the retail market and we are confident that we will be fully leased at opening with a very high quality mix of both international and local retailers.”
Asked why it took two years to get to construction phase, he said: “Building a shopping mall is a multi-phase, three to five year process. Mall of Egypt was in the design phase, and then we were waiting to find the right contractor to carry out the development and the necessary government approvals to proceed,” he said.
Referring to Mall of Egypt, OCI chairman and chief executive said: “This is the largest foreign investment in Egypt since the election of the new government. We have been very impressed by the efficient manner in which the new leadership reviewed required regulatory approvals for this project. The Mall of Egypt development marks an important milestone in Egypt’s economic recovery and signals a resurgence of private foreign investment in the country.”
MAF Properties direct investments in Egypt reached $410 million to date and opened malls including Maadi City Centre and Alexandria City Centre.