Dubai: Qatar's economy received a boost on Sunday with the announcement that construction is to begin on a new shopping complex in the capital Doha.
Al Futtaim Group and Qatar Islamic Bank (QIB) said a project team had been put in place for the development of Doha Festival City, a Dh6 billion retail, entertainment and hospitality complex.
Qatar is poised to experience huge economic growth following its successful bid to host the 2022 Fifa World Cup with some banks estimating the government will spend up to $72.5 billion (Dh266.2 billion) on infrastructure projects over the next five years.
"We hope to capitalise on the full potential of the boom generated by Qatar hosting the Fifa World Cup in 2022," said Marwan Shehadeh, managing director of Al-Futtaim Capital.
"The timing is absolutely perfect because construction costs are more attractive than in previous years," he added.
Construction of phase one of the project includes Swedish furniture giant Ikea, which is slated for completion in the second half of 2012, with phase two scheduled to be completed by 2014.
ACE Hardware, Toys ‘R' Us, Marks & Spencer and Intersport are the other Al Futtaim brands already confirmed as anchor tenants. Several of Landmark Group's brands including Centrepoint, Max Fashion, Sports Authority, Fitness First, Home Centre and Iconic have also joined the retail mix.
Shehadeh said Qatar was one of Al Futtaim's top priorities and he hoped Doha Festival City would become the country's primary leisure complex. "The main contract for the building of the mall, which will be worth around Dh3 billion, will be awarded later this year," he said.
"While the first phase will open next year, Doha Festival City will be fully up and running by 2014, which gives us eight years to take advantage [of the economy] before the finals begin in 2022. Furthermore, we are extremely bullish about the mall's future after the World Cup as Qatar will be more visible on the world map and the infrastructure will be in place to support further growth," he added.
Doha Festival City will be located 15km north of the capital on Al Shamal Road, one of the main arterial routes to the city centre.
"Qatar is developing at a very fast rate and a lot of new malls are to come online in Doha over the next few years. It will be interesting to see if there is more supply than demand," said Iftekhar Ahmad, group chief financial officer at Ali Bin Ali Group, one of Qatar's largest retail and distribution companies.
"We are interested in taking advantage of retail opportunities at Doha Festival City. However, they are also interested in our company; if we occupy space at the complex, it is possible that many other companies in Qatar will follow suit," Ahmad added.
Doha Festival City, a joint venture between Al Futtaim, QIB, Aqar Real Estate Investment Company and a private investor, will include a shopping complex, an entertainment park and two international hotels.
The 433,847 square metre facility will be designed by DP Architects with Arab Engineering Bureau appointed as project architects. MACE International have been named project managers while Al Futtaim Investment Management are the investment managers.
"This joint venture agreement with the Al Futtaim Group demonstrates both parties' firm commitment to not only enhance Qatar's development but amplify its positioning within the regional and global economy," said Shaikh Jasem Bin Hamad Bin Jasem Bin Jabr Al Thani, QIB chairman. "Ultimately, the agreement is in accordance with QIB's strategy to fuel the country's expansion and the State of Qatar's 2030 vision," he added.