Dubai: UAE-based Royal Star International is looking at a September timeframe to open the doors to what will be Iran's largest shopping destination, the Fars Shopping Complex in the southern city of Shiraz.
The $830-million (Dh3.04-billion) project will also lay claim to be the world's largest mall in terms of number of outlets by hosting a jaw-dropping 2,500 shops across the sprawling development.
The developer is putting in its own funds and tapping more by way of selling a portion of the available space to investors. The response to the sales programme has been quite encouraging, according to a senior official. Up to now, more than 40 per cent of the space put up for sale has been booked.
As to the reasons for choosing Iran, Hamzah Abu Zannad, director of operations at Royal Star International, said: "We are not looking at it from a political perspective but from a commercial one. That perspective shows Iran's economy getting stronger and creating more disposable incomes for its population.
"The retail sector there is still largely untapped and creates many opportunities for the kind of development we are bringing in. The investments make for a sound business case."
Royal Star International does have an affinity for untapped markets, Abu Zannad added, citing its exposure to Kazakhstan. "We maintain good relations with the authorities and they have the mechanisms in place to attract foreign investments," said Abu Zannad.
"And, just as important, offer security to it. "Maybe the regulatory side to this is not as advanced as in Dubai, but they have made a good start."
Apart from catering to its own resident base, the mall in Shiraz will tap the sizeable visitor traffic to the city, befitting its status as the prime tourist destination within the country.
"Not just that, Shiraz has a population of more than one million and an airport of its own," said Abu Zannad. "All these factors stack up in favour of the development."
On why the company went ahead with a sales push rather than lease all the space on its own, he said: "Most mall developers in the Gulf are publicly owned entities and have a number of options available to them to raise large funds. That's not a route we could have taken, hence the need to generate cash through selling space to investors. It will be confined to a certain portion and the rest will be retained by us for retailing."
Apart from going for scale on its size, the promoters plan to retain the same mindset regarding brands that will be featured there. Abu Zannad dismissed suggestions that the mall would principally cater to the mid-market.
"Some of the most prominent names in luxury fashion will be there and the feedback we have is they are definitely interested in creating opportunities in an untapped marketplace," he said.
A memorandum of understanding has been signed to bring in Carrefour as one of the anchor tenants, but operating under the Hyperstar branding, Zannad said.
"Details of the other anchors will be announced shortly, but there's no denying that the development is generating an extremely favourable buzz from the retail sector," the official added.
Besides packing in retail options, the developer is working on including leisure and entertainment aspects in the project as well. There will be a five-star hotel to be managed by an Italian operator, whose identity will be revealed at a later date.
To further accentuate the destination's credentials, an amusement park is also incorporated into the design. "Fars Shopping Complex is going to be a one-stop destination in Iran, where shopping and entertainment is concerned," Zannad said. "We are aiming for nothing less."
With the retail sector in the GCC showing signs of saturation, Royal Star International's push towards untapped markets in the region could yet set a trend.
Dubai Having started off with its Shiraz development, Royal Star International is intent on striking its roots deeper into Iran.
Mall in Tehran
"We are in the process of deciding on a mall in Tehran," said Hamzah Abu Zannad. "The land utilisation and design aspects are, I would say, in the finalisation phase."
The company's track-record with the Fars Shopping Complex in Shiraz would certainly be a help. Incidentally, at 420,000 square metres it is to be the fourth largest shopping mall in the world.
Clearly, there are not going to be any half measures for Royal Star International.