Majid Al Futtaim to invest $3.7 bln building two malls in Riyadh

Majid Al Futtaim will invest 14 billion riyals ($3.7 billion) building two malls in Saudi Arabia’s capital Riyadh, the Dubai-based company said on Monday.

The 300,000-square metre Mall of Saudi, which privately-held Majid Al Futtaim said would be the kingdom’s largest, will include shops, restaurants, entertainment, offices, hotels and residential units, plus Saudi’s first indoor ski slope.

The plans mark a major retail expansion into Saudi Arabia, despite reduced expectations for economic growth in the world’s top oil exporter due to a prolonged oil price slump.

“I see opportunities in challenges,” chief executive Alain Bejjani told Reuters on the sidelines of the launch event, pointing to the projects’ long gestation and the Saudi government’s programme of economic reforms.

Work on the larger Mall of Saudi will start in mid-2017, with the first phase of the mall to be completed by 2022, the company said in Riyadh.

Bejjani said he expected women would be allowed at the indoor snow park, but would defer to local regulations. The conservative Islamic kingdom imposes strict restrictions on gender mixing and women’s athletic activities.

The second mall - the 100,000-square metre City Centre Ishbiliyah in the eastern part of the capital - will include 250 shops when it opens in 2018. Majid Al Futtaim has acquired the building permit and plans to begin construction this year.

The company has already set aside funding for the projects as part of a five-year plan and does not intend to issue any debt for their construction, said Bejjani.

The company, which rivals Emaar Malls as Dubai’s top mall operator, last week reported an 8 percent rise in annual revenue. It did not disclose net profit.

($1 = 3.7490 riyals)