Dubai-based Al-Futtaim Group has signed a memorandum of understanding to create Saudi Arabia’s biggest shopping mall. The deal with Riyadh-based Kayannat Real Estate Company will lead to the establishment of Al Diriyah Festival City, which will have approximately 2.7 million sqft of gross leasable area located to the west of the capital city.
The $1.6 billion super-regional mall will be anchored by Ikea, construction of which is expected to start soon and completion scheduled in 12 months. A luxury 500-room hotel and serviced apartments will also feature in the development, which has obtained all necessary building permits to move into construction.
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. “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 $73.6 billion by the end of 2014, accounting for 17% of Saudi Arabia’s GDP,” says Omar Al Futtaim, vice chairman, Al Futtaim Group. “We are privileged to be able to enter into a partnership with a group of prestigious businessmen, including 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,” he adds.
“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,” observes Fahad Al Muqbal, Kayannat’s managing director.