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Emaar Properties announced the launch of a major new retail project at its Dubai Creek Harbour development on Tuesday, revealing plans to open a 750,000 square metre mall area called Dubai Square at a total cost of around 10 billion United Arab Emirates dirhams ($2.7 billion).
The mall is co-funded by investment company Dubai Holding, and will be part of a six square kilometre development project in the area. It will take five years to build, Emaar Properties chairman Mohamed Alabbar said at an event at the company’s Dubai Creek Harbour office.
The mall will be built next to the new tower under construction at Dubai Creek Harbour that is set to be taller than Dubai’s Burj Khalifa, which was also developed by Emaar.
“For the cost of the mall, it will reach around 10 billion dirhams… It will open in four to five years, which is the time of the construction phase,” Alabbar told reporters on the sideline of the event.
He said the funding will come from capital provided by Emaar, plus a “reasonable debt” amount. He did not give any details on the amount of debt or equity that would be invested. Alabbar said during the presentation that the mall will be 10 minutes from the Dubai International Airport, with a view to attracting transit visitors.
E-commerce
Alabbar, who is also the founder of the UAE-based noon.com online shopping portal, also announced during the presentation a new digital service called Dubai OS - an e-commerce service that will include a phone application that will give retailers in Emaar Malls the option to feature their products online. Dubai OS will allow shoppers to either buy goods online for delivery, or buy online to pick up from stores.
Alabbar said the e-commerce service will be run by Emaar and will be available in other Middle Eastern cities “such as Cairo”.
“Dubai OS will be called Cairo OS when it is in Cairo,” Alabbar said, speaking to reporters on the sidelines of the event. He said that e-commerce in Egypt will grow eventually and the services will allow the option of cash on delivery to overcome the fact that credit card penetration in the country remains low.
The e-commerce market is growing at a fast pace in the GCC - a region with a mainly young and tech-savvy population. It is forecasted to grow to $24 billion by the end of the decade - up from $15 billion this year, according to a report issued by consultancy firm A.T. Kearney.
But the online shopping market is still immature in Egypt, the Arab world’s most populous nation of over 97 million people.
A State of Payments in the Arab World Survey’ published in October last year by Amazon-owned digital payments firm Payfort showed that Egypt-based residents completed $6.2 billion worth of online transactions in 2016, compared to the $12.4 billion of online transactions in the UAE and $8.3 billion in Saudi Arabia. The populations of the UAE and Saudi Arabia are around 9 million and 33 million respectively.
“The growth of e-commerce and the digital economy worldwide is growing. If your aim is three years, you will fail. If your aim is 15 years, then this is really the future,” Alabbar said.
Check the full gallery here: Mega shopping mall coming up near Dubai Creek Tower
Selling assets and IPO
When asked about recent reports suggesting an oversupply of properties in the retail sector in Dubai, Alabbar said: “I think the world should give us a break. We are 43, 44 years old - a baby. I think we need time to grow. You know in history of cities, cities see the sun and see the night. They see cycles that come and go.”
Alabbar was also asked about recent reports stating that Emaar is planning to sell some of its assets, which was initially reported by the Financial Times. He did not confirm or deny the reports, stating: “The trouble is you guys don’t understand the hospitality business, we should not be holding assets as a hotel operator.” He did not give any further details.
In May, Emaar Properties, in which the Dubai government owns a minority stake, reported an 8.5 percent increase in its net profit for the first three months of the year to March 31. The profit stood at 1.5 billion dirhams, up from 1.38 billion dirhams in the same period of last year.
Dubai Square at Dubai Creek Harbour
Emaar Properties is the parent company of several companies, including Emaar Malls, Emaar Development and Emaar Hospitality Group.
Alabbar said there are no plans to launch an initial public offering (IPO) for Emaar Hospitality Group. Both Emaar Development and Emaar Malls are already listed companies.
(Reporting by Yasmine Saleh; Editing by Michael Fahy)
(yasmine.saleh@thomsonreuters.com)
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