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Al-Futtaim to replicate Festival City formula

Five more cities to be set up in Cairo, other cities
The Al-Futtaim Group Real Estate ( AFGRE ), a more recently formed division of the Al-Futtaim Group based in Dubai, is looking to have approximately five more Festival City-concept developments within the next five to 10 years. Following the existing Dubai Festival City formula, AFGRE has announced the launch of the second festival city development which is to be built in Cairo, Egypt.

Peter Young, director, retail development at AFGRE , told The Business Weekly that the company is looking to invest Dh15 billion to Dh20 billion in the next five to 10 years in order to have a total of six festival city developments up and running by then. He mentioned that while the second festival city is to be developed outside of the UAE, the company may eventually have about two or three of such developments within the country, with the remaining to be developed within the MENA and Asian region.

While not making any official confirmation on the possible locations for the upcoming festival cities, he did give a hint about India and another country in Southeast Asia as being attractive propositions.

Possible JVs
Young also indicated that the company, although having the necessary expertise and financial backing to further roll out the festival city concept, is open to possible joint ventures, should the right opportunity and the right partner come along in the future.

"We are in negotiations with a number of partners in the MENA area and in Asia to roll out the festival city formula format," Young said. "And if it may come in the form of a joint venture (JV), although we are capable of doing it ourselves as we have got the financial backing support and the in-house expertise to deliver the entire concept, we're quite flexible."

"If the right opportunity presents itself with a strong partner, we'll be very happy to do that as well," Young added.

Following the successful concept of the Dubai Festival City's mixed-use urban development concept, AFGRE was formed with an objective of making it responsible for the development and operations of the group's real estate businesses across the MENA region.

The company is currently responsible for the conception, development, procurement and construction of a number of mega projects as well as the leasing and operation of these projects after completion.

Festival City brand
Being a relatively young company that is still continuously evolving, particularly with regard to the business activities that it may eventually engage in, Sarah Harrison, general manager for marketing at AFGRE , told The Business Weekly that while the company's priority is to conceptualise, build, operate and manage its own developments, there is a possibility that in the future they may end up running somebody else's property on their behalf under the Festival City brand.

" AFGRE is still evolving, and since we are still a new company, and it could be months before we could find new opportunities. With our expertise in the operations side as well, we could end up operating a shopping centre on behalf of somebody else or property managing on behalf of somebody else. But at the moment, it is our own festival city brand," Harrison said.

AFGRE 's two current flagship mixed-use developments under the Festival City brand name are the Dubai Festival City and the newly launched Cairo Festival City.

Expansion plans
The Dubai Festival City, which opened in phases, is a 5.2 million square metre premier waterfront mixed-use urban community. Spanning 1,300 acres and stretching three kilometres along Dubai Creek, Dubai Festival City encompasses easily accessible shopping, dining, entertainment, homes, schools, hotels, offices and leisure in one place.

The 2.8 million square feet urban waterfront retail resort that forms the epicentre of Dubai Festival City is now undergoing an additional 550,000 square feet Luxury Expansion which will connect Festival Waterfront Centre to the prestigious Four Seasons Hotel Dubai Festival City.

The luxury brands area would also interlink with the Festival Promenade, Festival Marina and the neighbouring waterfront pavilions, Trade Routes and Hub & Taste.

This section will have a carefully selected mix of over 170 of the finest boutiques and luxury services, as well as an eclectic choice of bistros and cafés that will offer retailers an unrivalled opportunity to showcase their brands in a premium retail environment.

Another expansion within the Dubai Festival City will be that of the existing Festival Power Centre. With the 655,000 square feet centre once completed, the expansion will provide an additional 25 outlets ranging from 3,000 square feet to 25,000 square feet.

The Festival Power Centre Expansion will feature the largest collection of 'Big Box' home furnishing and accessories retailers in the UAE offering the widest range of products to the ever growing population on 248,000 square feet of leasable area.

Cairo project
As the second development under AFGRE 's Festival City brand name, the Cairo Festival City, will be a premier, mixed-use three million square metre development that will comprise retail, dining, entertainment, hotels, luxury residential villas and apartments, offices, schools and an automotive park, all in one self-contained, modern 'city'. The privately funded, EGP20 billion Cairo Festival City is located at the gateway to New Cairo City on the Ring Road, 20 kilometres southeast of greater Cairo and only 15 minutes from Cairo's International Airport.

The principal business districts of Heliopolis and Maadi are within easy reach of Cairo Festival City.

By Albert Alba

© The Business Weekly 2008