Al-Futtaim Group has entered into a joint venture with local partners to develop Saudi Arabia’s largest shopping mall, in Riyadh. Once completed, it will feature a 500-room luxury hotel.
The Dubai-based conglomerate has signed a memorandum of understanding with Kayannat Real Estate Company to create Al Diriyah Festival City.
Covering 250,000 square metres of gross leasable area and located to the west of Riyadh, the SAR6 billion (US $1.6 billion) project will be anchored by Ikea, construction of which is expected to commence soon, with completion scheduled in 12 months.
In addition to the 500-room luxury hotel, there will also be serviced apartments. Al-Futtaim said the development has already obtained all necessary building permits to move into construction.
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“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 by the end of 2014 which accounts for 17% of Saudi Arabia’s GDP,” said Al-Futtaim Group vice chairman Omar Al-Futtaim.
“We always plan ahead taking a long-term strategic view and this agreement will add another significant asset into our portfolio of regional malls. It gives us a footprint into the Kingdom’s retail sector and extends our network of shopping centres, which currently includes a number of operational or under-development assets across the Middle East.”
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.
Al-Futtaim currently operates its flagship Dubai Festival City Mall in the UAE and is either already operating or developing a number of other large malls across the Middle East.
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