Mall Operator MAF of Dubai Stays Course on Mideast PlanZainab Fattah
Majid Al Futtaim Holding LLC plans to proceed with expansion across some of the most troubled countries of the Middle East, tapping the rising disposable income of the region’s growing population.
“We continue to focus on a prudent and sustainable growth strategy,” said Chief Executive Officer Iyad Malas in a statement announcing the full-year earnings of the Dubai-based malls and hotels operator. He confirmed plans to complete this year the Beirut City Center Mall, and to start construction on the Beirut Waterfront project in Lebanon, and the Mall of Egypt in Cairo.
The privately owned company, also known by its acronym MAF, reported a 10 percent increase in revenue to 21.6 billion dirhams ($5.9 billion) in 2012, on higher hotel occupancy and sales at its Carrefour supermarkets, the company said in a statement. Earnings before interest, taxes, depreciation and amortization rose 7 percent to 3 billion dirhams.
“Rising disposable income and a persistent low interest rate environment in Gulf Cooperation Council states will cause an increase in consumer spending,” Dubai-based Arqaam Capital said in report yesterday about the retail industry in the Middle East and North African region. “Governments in MENA have and will increasingly adjudicate on matters of food and fuel subsidies with the consumer as priority beneficiary, rather than incumbent businesses and private sector commercial interests, in light of the civil unrest of the past two years.”
MAF opened in 2012 its 11th shopping mall and added during the year 14 supermarkets including seven for Carrefour.
It plans to sign in February a three billion Egyptian pound-loan ($450 million) syndicated by a group led by National Bank of Egypt and Banque Misr SAE, to finance the Mall of Egypt, CEO Malas said in a interview.
It plans to work on the expansion of the Maadi City Center project and a mall in Almaza in Cairo, and is in the process of securing permits for a mall in Madinet Nasr, in the suburb of the Egyptian capital, he said. “It might take few months but we expect to start on all these projects in 2013.”
The company is also seeking to purchase plots to build malls in the United Arab Emirates’ cities of Abu Dhabi and Sharjah, and the Saudi Arabian capital Riyadh, Malas said.
“We are in an extremely solid position for the next two years,” Treasury Manager Daniele Vecchi said. With debt due this year of less than 1 billion dirhams, the “company won’t need to raise money this year and will do so opportunistically.”
“Clearly as debt comes into maturity in the course of the year we would want to rethink of financing and we would think of the right market debt or bank,” Malas said.