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Well-known for its retail developments across the region, Majid Al Futtaim (MAF) is now making a big push into the real estate development sector with big-stake projects under its property development division, MAF Properties. The company announced more than Dh30 billion in investments over the next decade until 2026, nearly twice the Dh18-billion investment in the past two decades.
The investments include a large mixed-use community along Shaikh Mohammad Bin Zayed Road, which will feature a regional City Centre Mall and hotel hotels. Homes in the master-plan community will be launched around 2020. The company will also build 10 new City Centre Malls, six hotels and Carrefour hypermarkets, and will expand several of its existing assets.
“We’re known to be strategically focused and financially disciplined when it comes to underwriting new projects and operating them,” says Alain Bejjani, CEO of Majid Al Futtaim Holding. “Yes, we’re investing in interesting times, with global and regional challenges and opportunities.
“However, we know this region, where social demographics are sustainable. We weathered the low oil prices, the UAE has managed to diversify tourist inflows and we are in an upward market from the retail point of view. We see positive trends, we don’t discount challenges [but are not concerned about them] as we know how to manage and turn them into opportunities.”
The company says its new projects would create around 170,000 jobs directly and indirectly, and add 725,000 sq m of new retail space.
“We remain committed to our BBB credit rating, and these projects will be funded in line with our prudent and proactive financial management approach,” says Bej-jani. “It is about more than just numbers, [it is] about Majid Al Futtaim supporting the UAE as a world retail and entertainment destination, as well as its people.”
The company has already acquired the land for all its projects, with planning approvals in process. Bejjani says funding is already in place, although he doesn’t rule getting additional funding from the markets.
“We’re not in the bonds market right now, but we may be in the future,” he says, adding that “all projects are well funded”.
“The integration of our property models with retail and entertainment gives us a number of safety nets when it comes to underwriting new investments, so our capabilities outperform the market.”
MAF Properties already has a number of master-planned communities under its portfolio, including the Waterfront City in Beirut, Al Mouj Muscat (previously known as The Wave) and Al Zahia in Sharjah. The developer already has 3,000 residential units under construction, and 1,300 families living in its communities.
“Our master-planned communities integrate all of the firm’s capabilities, which we develop from the consumer point of view, and considering demographics in the area,” says Robert Welanetz, CEO of MAF Properties. “The type of residences we’re building is customised to what they want rather than just building blanket residential. The community perspective also tunes very directly into the design of the retail and hotel that we plan.”
Its Dubai master-planned community will encompass 740,000 sq m, featuring residences for 2,000 households, a large-scale regional City Centre Mall, several hotels and weaving in leisure and entertainment facilities, according to Welanetz.
“The scale of the project is significant,” says Welan-etz. “We haven’t got to the exact number of villas versus apartments yet, but are looking at it. All will be low and mid-rise; no high-rises.
“We’re also still debating how many hotels we’ll add to it, but we consider the property prime for hotels.”
The company is upbeat about the location of the project, which is close to Global Village. “The south-eastern growth corridor is probably most significant for opportunities because of population growth and available land [in the area],” says Welanetz.
The developer expects to start construction next year on the development, which is directed at the mid-income group, and launch the residential component by 202021. “This is a mixed-use community, which could take easily up to 10 years to complete,” Welanetz explains. “Planning and building the infrastructure takes time.
We’ll build the residential in phases based on the market dynamics, releasing certain inventory when the market is most prime to do so.
“We’ve acquired the land and we have to go through detailed planning to get full approval from the authorities, but we don’t expect any difficulties with that. By year-end we’ll have a ready designed detailed plan, and I would expect we will be out next year for the early stages of site preparation, then move into construction.”
City Centre malls, hotels
The developer’s retail projects include a 1.4 million-sq-ft super-regional mall in its Al Zahia community in Sharjah, and a City Centre in Masdar City. “Two out of 10 malls planned will be in Dubai, and will be within the envelope of the master-planned communities across the UAE,” says Welanetz. “We also have expansion projects in Ajman and a small project in Ras Al Khaimah.”
Welanetz says existing assets will also be redeveloped with a mixed-use focus hailing. “We’re planning new projects, but [also] making sure that we’re optimising existing assets. The mixed-use, longterm nature of our property growth plan is important.”
Five out of the six hotels on the menu will be in Dubai, with one in Sharjah’s Zahia. These are expected to open around 2019-21.
Source: Nicole Walter, Special to Property Weekly