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Overseas expansion on the horizon

DUBAI -- Al-Futtaim Group Real Estate ( AFGRE ), a subsidiary of Al-Futtaim, which on Sunday announced a Dh6 billion mega retail and leisure development in Doha, is also working on expansion plans for stores in Singapore and Malaysia, a top official of the company said.

"We are investing a significant amount on expansions of Robinsons Dept Store as well as Marks & Spencer over a period of five years," Philip M. Evans, Director for Commercial and Retail Leasing of Al-Futtaim Group Real Estate, told Khaleej Times in an interview.

Evans said the group is actively considering new sights in this regard.

In reply to a question, he said Al Badia Residential project's phase three will be completed next year while work on Business Park phase one is in full swing to accomplish it by the third quarter of 2011.

Evans also revealed that Hard Rock Café will start functioning in Dubai Festival City in October. He said a night club spanning over 25,000 square feet adjacent to Hard Rock Café will open early next year.

Below are the excerpts from the interview:

Could you please share some details of group's retail business interests in Singapore and Malaysia?

We purchased the Robinsons Group three years ago which includes Marks & Spencer, Coast, Fat Face, Trucco and River Island franchise rights for both Singapore and Malaysia, we are actively working on an expansion plan for both our Robinsons Department Store as well as Marks & Spencer and Marks & Spencer stand alone food stores. The expansion cost will be significant over the next 5 years

Do you feel Dubai Festival City project is overshadowed by new projects in Business Bay, Marina and Jebel Ali?

No, Dubai Festival City is distinct in that we are the only established creek side mixed use destination and community interconnecting the finest residential, shopping, dining, leisure and entertainment, hotels, schools and offices in one place.

Our existing infrastructure and the accessibility feature of Dubai Festival City also ensures we stand out:

In conjunction with Dubai Municipality and numerous traffic management consultants, Dubai Festival City has designed a superior traffic plan to accommodate all stages of a developmental growth in traffic, incorporating wide and spacious internal road systems designed for ease of access and minimal traffic congestion linking all major elements and allowing quick access between attractions of the site:

a. The Business Bay Crossing, which has three designated lanes to Dubai Festival City,

b. Al Garhoud Bridge -- easy access into DFC

c. The water taxi station opened in July 2010 -- outside InterContinental Dubai Festival City

d. Public Transport buses are already circulated inside the community

e. Internal transport shuttles are provided between 10am-11pm daily

Festival Centre, the retail resort of DFC

a. Largest range of F&B dining options, with 33 per cent brands new to the UAE

b. Hard Rock Café (opening in October 2010)

c. Located on the waterfront of the historic Dubai Creek overlooking the only circular marina in Dubai

d. Interconnected to InterContinental and Crowne Plaza five-star hotels that feature wide range of nightlife and dining options

e. Over 400 shops and services as well as entertainment and leisure, Bowling City, Grand Festival Cinemas

Al Badia Golf Course -- 18 hole championship course with a uniquely designed club house offering five dining options, golf academy and driving range.

Living @ DFC -- lease or buy across 3 distinctly differently residential areas, Marsa Plaza (modern high rise apartments) Hillside Village (Arabic themed architecture) and Al Badia Residences (Mediterranean themed).

You are going to set up first traditional Retail Park in the UAE. How much area will be leased out in Dubai Festival City under this project?

Our plans are in two phases and will lease out total approx 300,000 square feet space.

Festival Centre is expanding its 'Big Box' retailer offer. Which brands or groups you are targeting to make this offer a success?

We are not in a position to announce new brands yet, but the mix will be aimed at Lifestyle brands to complement the existing Big Boxes such as IKEA, Plug Ins and ACE.

You are finalising the leasing of 1.9 million square feet Festival Centre in Dubai. Could you please share some details in this regard?

We have just announced our deal with Hard Rock café, in addition we have finalised the leasing for our 80,000 square feet indoor Family Entertainment Centre which will be a theme park with indoor roller coasters modelled on Casper the Ghost and will open in December. In addition, we will be launching and progressively opening our restaurant pavilion on the Marina after Eid. Early next year we will be opening a 25,000 square feet nightclub adjacent to Hard Rock Café.

Which new brands or groups you are targeting in 2010?

Our focus will be on international fashion brands from around the world.

Festival Centre opened 21 new stores in second quarter. How do you see the second half of 2010?

As referred to above, we will be opening a number of restaurants in the second half of 2010, in addition to Hard Rock Café and our Family Entertainment Centre. We have plans to lease up to 130,000 square feet space compared to 80,000 square feet at present.

The global economy is recovering. Do you think it will revive tourism and retail sectors of Dubai?

Proleads, a Dubai-based research company, has predicted in May that among GCC countries, UAE will see the largest amount of spending on new hotels at around Dh1.7 billion defying the lingering pressures on the tourism sector globally.

A recently-released Dubai Chamber analysis also indicated that Dubai's retail sector has shown a high growth performance thanks to the concept of modern retailing as well as high per capita income levels. The analysis further pointed out that in spite of the challenging economic environment; shopping malls continue to expand in the UAE. As you can see, we just won the HRC deal which is to relocate to Festival Centre. In the second quarter of 2010 we announced the opening of 21 new stores.

Total revenues at 23 shopping malls across Dubai reached Dh1.49 billion, up from Dh1.27 billion at the same shopping malls in 2008.

The GCC retail industry is expected to grow in the future with a rise in population, urbanisation, middle class (with increasingly higher per capita income), inflow of tourists and a growing number of passengers in transit. These factors continue to provide conditions conducive to retail development in the GCC countries, according to a new report by Alpen Capital, entitled "GCC Retail Industry Report 2010."

The recession hit real estate hard last year. Do you think real estate will recover this year or in 2011?

I do not think we will see real sustained recovery until 2012. We are close to see the bottom at the moment and will stay for a while before the recovery starts. We still have to face tough days ahead.

What's the progress on Cairo Festival City project's completion?

We are well underway with construction of the retail mall opening in spring 2012, our Oriana villas and now our Commercial office park.

Festival Centre at Cairo Festival City due to open in 2012. Do you think you will lease out 100 per cent space before opening?

We are aiming to be 95 per cent let on opening and are well on target to achieve that, interest from both retailers and F&B/Leisure operators has been phenomenal. All the major brands like IKEA, Carrefour, Plug-ins and Marks & Spencer will present at the mall besides some new brands are also expected to join the project upon completion. It will be best mall in North Africa.

By Muzaffar Rizvi

© Khaleej Times 2010