Abu Dhabi headquartered retailer Lulu Group has said that it expects the eight new hypermarkets it is planning in Egypt to open within the next four years.

The retailer, which is led by chairman Yusuff Ali M.A., said in a press release on Wednesday that it is planning to spend an initial 2 billion United Arab Emirates dirhams ($544.6m) on opening four new hypermarkets in Egypt. These will be based in 6th of October City, in Al Narges and Al Rehab City in New Cairo, and at Al Obour City.

Lulu already has one hypermarket in Cairo that opened in December 2015, and a spokesman said in an emailed response to questions from Zawya that the four new units planned are expected to open "by the end of 2020", with four more due by the end of 2022.

The company said in its statement that the new stores will follow a protocol agreement with the Egyptian government, with Ali hailing “the excellent opportunities and facilities being offered by the Government of Egypt to investors".

The spokesman said that the sites chosen were offered to the company by Egypt's prime minister, Mostafa Madbouly, in co-operation with the country's housing and investment ministries, and that sites had been chosen due to population figures in the surrounding catchment area.

The spokesman said Egypt had been "in our radar for future investments, given the size of the market and population".

"We have been holding serious, high-level discussions with key stakeholders as well as the top leadership of the country, and the positive response that we got has given us enough confidence to go ahead with the expansion plans," the spokesman said.

Lulu said in its statement that it expects to create jobs for 3,000 Egyptian through these new hypermarkets, and the spokesman said it anticipates "an additional 2,000 (jobs) by way of indirect employment."

The company's statement on Wednesday said it has 160 stores across the Gulf Cooperation Council (GCC) countries, India and the Far East.

A report published by JLL MENA last month on the prospects for real estate in Cairo said that despite 300,000 square metres of retail mall space being added to the market last year, vacancy rates actually came down by 1 percent to 14 percent in 2018 and prime rents in major malls increased by 10 percent.

"This increase in rents reflects strong demand for units and the continued recovery of the retail sector since the currency devaluation in 2016," the report said.

A further 375,000 square metres of mall space is due to be added to the market this year.

(Reporting by Michael Fahy; Editing by Mily Chakrabarty)

(michael.fahy@refinitiv.com)

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