Dubai's Al Futtaim to develop largest Saudi mall

Dubai-headquartered Al Futtaim Group has signed a memorandum of understanding (MoU) with Riyadh-based Kayannat Real Estate Company to build Saudi Arabia’s biggest shopping mall, Al Diriyah Festival City, in Riyadh.

Omar Al Futtaim, Vice-Chairman of Al Futtaim Group, and Fahad Al Muqbal, Managing Director of Kayannat, signed the agreement in Dubai.

According to the MoU, Al Diriyah Festival City will have 250,000 square metres of gross leasable area (GLA) and be located at the west of Riyadh.

The Saudi riyal 6 billion ($1.6 billion; Dh5.87 billion) mall will be anchored by Ikea, construction of which is expected to commence soon and completion is scheduled in 12 months.

A luxury 500-room hotel and serviced apartments will be another key feature of the development which has obtained all necessary building permits.

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.

“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, accounting for 17 per cent of the kingdom’s GDP,” said Omar Al Futtaim.

“We are privileged to be able to enter into a partnership with a group of prestigious businessmen who include the franchisee of Ikea in the kingdom, Dr Ghassan Ahmed Abdullah Al Sulaiman, in order to tap into this lucrative market,” he added.

Fahad Al Muqbal said: “Once completed, Al Diriyah Festival City will elevate Saudi consumers’ retail experience to a new level.”