Dubai: Who cares if today’s global economy is scaring people?
Majid Al Futtaim says it sees enough future growth right here in the UAE to justify an additional Dh30 billion investment over the next 10 years.
The Dubai-based retail and hospitality company said on Wednesday that it will boost its investment in the country from Dh18 billion to Dh48 billion by 2026.
It plans to develop 10 City Centre-branded shopping malls, six hotels, a mixed-use community, 15 cinemas and 40 Carrefour outlets, as well as expand six existing malls, such as City Centre Ajman and City Centre Me’aisem.
”We are at the end of a downturn in the market,” said Alain Bejjani, chief executive of Majid Al Futtaim- Holding.
“So I don’t think we are in a bubble. I think the UAE has weathered very well the downward economic trends in the past [few] years. And now we are actually getting out of it. The trends are positive. Demographics [and] tourism inflows are positive…,”
When asked how the projects will be financed, Bejjani told reporters in Dubai that “[the company is] going to fund our projects based on our credit rating … I am not announcing today anything on the funding side … our plan is well-thought, well-funded.”
The expansion is driven by an increase in the local population and tourism, according to Robert Welanetz, chief executive of Majid Al Futtaim- Properties.
However, concerns over lower oil prices and the health of the economy have pushed some consumers in the UAE to cut down on their spending. In a survey by market research firm Nielsen last month, one in every two respondents believed the economy was in recession. Meanwhile, hotels in Dubai are recording lower occupancy rates due to a drop in the number of visitors from certain markets and increasing hotel room supply.
But Bejjani said he is not concerned “because we know how to manage those challenges,” he said.
He pointed out that Dubai has room for more “quality shopping centres.”
Mathew Green, head of research and consultancy for the UAE at CBRE, expects the new City Centre malls to perform well. “[Majid Al Futtaim] has a format that people like. City Centre is established across the region.”
He said that the larger malls in the UAE are performing well. “It’s the smaller malls where you see more challenging conditions come into play,” he added.
The new malls — which will be located in Dubai, Abu Dhabi, Sharjah and Ajman — are scheduled to open before 2020, Bejjani said, adding that land has already been acquired.
Of the two malls planned for Abu Dhabi, one will be a community mall in Masdar City, Bejjani said, but declined to give the location of the second one.
“We are already present in Abu Dhabi with Carrefour, Vox Cinemas, Magic Planet and our fashion brands, so it’s natural for us to expand our shopping malls there,” he said.
Meanwhile, a super-regional mall is scheduled to open in Sharjah, adjacent to the Al Zahia community.
In terms of the hotels, five are set to open in Dubai and one in Sharjah between 2019 and 2020, according to Welanetz.
Two of the hotels will be next to Mirdif City Centre, while one will be next to Mall of the Emirates, Bejjani said. Some of these will be operated by Starwood and Accor.
The mixed-use development, located on Shaikh Mohammad Bin Zayed Road, near Global Village, will include a City Centre mall, hotels and 2,000 households, according to Welanetz, adding that the land has already been acquired. The development will cover 740,000 square metres.