Dubai-headquartered Al-Futtaim group, a leading diversified conglomerate, has signed a memorandum of understanding (MoU) with Riyadh-based Kayannat Real Estate Company to create Saudi Arabia’s biggest shopping mall.
The SR6 billion ($1.6bn) super-regional mall, which will take shape in Riyadh’s Al Diriyah district, will be anchored by IKEA.
Construction of Al Diriyah Festival City is expected to commence soon and completion is scheduled in 12 months.
A luxury 500-room hotel and serviced apartments will be another key feature of the development which has obtained all necessary building permits to move into construction, a statement said.
The mall will have 250,000 sq m of gross leasable area (GLA) and be located at the west of Riyadh, 5 km from King Saud University and 10 km from King Abdullah Financial District.
It will redefine Saudi capital Riyadh's retail landscape, a statement said.
Under the agreement, Al-Futtaim will manage all matters related to the Al Diriyah Festival City project providing investment and development management services to construct, develop, lease and operate the mall.
Omar Al-Futtaim, vice chairman, Al-Futtaim group, and Fahad Al Muqbal, managing Director, Kayannat, signed the agreement during a ceremony held in Dubai attended by officials of the various parties involved in the project.
“With a population of 30 million Saudi Arabia is the GCC’s biggest market with a booming retail sector expected to reach a value of SR276 billion by the end of 2014 which accounts for 17 percent of Saudi Arabia’s GDP,” said Al-Futtaim.
“We are privileged to be able to enter into a partnership with a group of prestigious businessmen who include the franchisee of IKEA in the kingdom, Dr Ghassan Ahmed Abdullah Al Sulaiman, in order to tap into this lucrative market and further contribute to the kingdom’s economic development,” added Al-Futtaim.
Al Muqbal said: “On this momentous occasion for Saudi Arabia’s retail sector it is with great pleasure that we partner with Al-Futtaim group, with its proven track record in shopping mall development and operations. Once completed, Al Diriyah Festival City will elevate Saudi consumers’ retail experience to a whole new level.”
Bordered by the famous Wadi Hanifa and one of Riyadh’s greenest belts, the Al Diriyah Festival City site is connected to the major road arteries of the city and is considered to be the gate of the Old Diriyah Area. A number of affluent residential master planned communities are taking shape to the north of the site and are expected to significantly increase the mall’s catchment population in the years to come.
Al-Futtaim presently operates its flagship Dubai Festival City Mall which opened in 2005 and in November 2013 the group inaugurated Cairo Festival City super-regional mall anchored by IKEA Egypt. In Qatar, Al-Futtaim and its joint venture partners have completed phase one of Doha Festival City, a super-regional mall. Furthermore, the group has also signed a joint venture with local governmental entities in Muscat jointly develop Oman's largest shopping mall anchored by the country’s first IKEA store. Al-Futtaim group is also co-developing a shopping mall in Casablanca. Two further regional malls are in the early planning stages, the statement said.