CONSTRUCTION of what is expected to be Saudi Arabia’s biggest shopping mall is to start soon, following the signing of a memorandum of understanding (MoU).
Dubai-based Al Futtaim group, a leading diversified conglomerate, has signed the agreement with Riyadh-based Kayannat Real Estate Company to build the SR6-billion ($1.6 billion) Al Diriyah Festival City.
The mega mall will take shape in Riyadh’s Al Diriyah district, 5 km from King Saud University and 10 km from King Abdullah Financial District.
Scheduled for completion in 12 months, the mall will have a gross leasable area (GLA) of 250,000 sq m and will be anchored by Ikea.
A luxury 500-room hotel and serviced apartments will be another key feature of the Al Diriyah Festival City.
Under the agreement, Al Futtaim will manage the Al Diriyah Festival City project, providing investment and development management services to construct, develop, lease and operate the mall.
Omar Al Futtaim, vice-chairman of Al Futtaim group, and Fahad Al Muqbal, managing director of Kayannat, signed the agreement.
“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 SR276 billion ($73.58 billion) by the end of 2014 which accounts for 17 per cent of Saudi Arabia’s GDP,” said Al Futtaim.
“We are privileged to be able to enter into a partnership with a group of prestigious businessmen who include 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 added.
Bordered by the Wadi Hanifa and one of Riyadh’s greenest belts, the Al Diriyah Festival City site is connected to the major road arteries of the city and is the Old Diriyah area.
In other developments, Al Futtaim group has signed a joint venture with local governmental entities in Muscat to jointly develop Oman’s largest shopping mall anchored by the country’s first Ikea store.
It is also co-developing a shopping mall in Casablanca, Morocco.
Two further regional malls are in the early planning stages, a company statement said.