UAE’s Majid Al Futtaim eyes Spinneys stake in $1bn investment drive

MAF is studying a purchase of Abraaj Group’s stake in the Spinneys Middle East franchise outside of the UAE. (File photo: Reuters)

UAE’s Majid Al Futtaim Holding (MAF) - sole franchisee of hypermarket chain Carrefour in the Gulf - said it foresaw capital investments of up to $1 billion this year as it steadily expanded its foothold in the region.

The Dubai-based company is in the early stages of looking at buying Abraaj Group’s stake in the Spinneys Middle East franchise outside of the United Arab Emirates, reported Bloomberg.

The $1bn investment drive did not include a $680 million acquisition of a 25 percent minority share from Carrefour Group that will give MAF full ownership of the Carrefour franchise in the region, Iyad Malas, the chief executive officer said in an interview on Saturday.

“Our capital investments could be anywhere between $600m and $1bn this year,” said Malas on the sideline of the World Economic Forum (WEF) on the Middle East and Africa.

The developer and operator of shopping malls will go on a road show to raise the money from institutional investors for the purchase of its minority share, Malas said.

Sales growth in the region had not been affected by the Arab Spring because consumption rates and investments continued to grow.

“In 2010 we spent capex of over a billion dollars and since then it slowed down a little, not because we want to but we are not seeing things moving as fast,” Malas said.

MAF, the franchisee for Carrefour hypermarkets in 19 countries and operator of some of the biggest malls across the Middle East and North Africa, was expected to maintain healthy growth in 2013, he said.

Sales outlook for 2013 was “hopefully in line with a 10 rise” in Q1, compared to 9 percent growth last year, Malas said.

“Clearly Dubai is our big base but our focus is on retail and shopping malls. These sectors have continued to do well everywhere because the average Egyptian or Jordanian still wants to eat and we are a low cost provider. We are not offering high-end offering, we are offering something for the mass,” Malas said.

The emirate’s population has been swelled by people seeking refuge from political strife in the Middle East and economic malaise in Europe, which is also supporting retail sales.

“We are a big buyer, we have good purchasing power from the suppliers and we pass this on to consumers,” he said.

MAF’s major regional investment was a retail and entertainment complex in Egypt at an investment worth around $600m.

The firm was also looking at a presence in Libya and had just expanded in Lebanon, with a large project that was opened recently.

But a prime investment in Syria before the 2011 uprising remains suspended because of the civil war and one Carrefour store in Syria’s Aleppo was shut as a result of the violence.

“We just opened our last store in Beirut and we will continue to expand into the rest of the territory this year with a healthy outlook,” Malas said.

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Last Update: Wednesday, 20 May 2020 KSA 09:40 - GMT 06:40
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