JEDDAH, 19 March 2006 — Supermarkets are likely to be less frequented by families with the emergence of themed hypermarkets and so-called “gigamalls.” What investors in future malls aim to achieve is an integration of shopping services and various family activities.
Aside from local and international brand names spread throughout the different walkways and lanes, these new malls will be equipped with elevators, escalators and “travelators” (wide, step-less escalators that are magnetized to hold shopping carts in place on the incline) to ease the flow of shoppers through the different levels. These vertically oriented modes of transport will certainly promote shopping at upper levels in a country where shoppers generally prefer one-floor shopping.
These gigamalls will host international food courts with a wide variety of restaurants and fast-food outlets. And, of course, there will be exclusive children’s area for recreation and entertainment and even a cinema or a theater. In fact, most existing malls already provide some of these facilities, although not in a “giga” fashion.
Many new real estate entities are now in the business bringing together developers and investors to establish such malls. But why more malls when already so many exist. Don’t Riyadh, Jeddah, Dammam and other major cities have enough of them?
“No, they don’t have enough malls,” says Mohammad I.B. Alawi, vice president of the United Properties Company (UPC). “Maybe certain areas or major roads are dotted with many malls, for example Jeddah’s Tahlia Road. But what about other city districts?” he said.
And that is why the UPC is seriously involved in establishing malls in different parts of cities and across the Kingdom. Established in 2004, the UPC, as a joint-venture partnership between the Savola Group and Old Mutual Properties of South Africa, has planned several major projects in eight Saudi cities in three years. They include Azizia Mall and Rimal Center in Riyadh, and Jamea Plaza, which recently opened, and Roshan Mall in Jeddah. The UPC’s shopping mall projects involve an investment exceeding SR3.5 billion.
“Our growth as a company is more than what we expected. This is because we offer a full package of solutions for property developers and investors. Our package involves feasibility studies, market research and financing, especially from banks,” Alawi said.
Six years ago, there were no professional property developers. “The trend in vogue is a collective effort between professional real estate solution providers as well as developers and investors,” he said.
Among the trendsetters are many new professional companies that are entering the market. “They are making the business highly competitive across the country where there is a huge demand for residential, office, commercial and retail complexes, and shopping malls,” Alawi said.
The Kingdom’s total retail space is 60 percent below the needs of its consumers, he pointed out. The strong growth witnessed in the real estate sector has obviously increased land prices. “In Jeddah, for instance, prices on the King Road have gone up by 100 percent and those on King Fahd Road tripled in the past two years,” he said.
Galloping land prices are a major reason why future shopping malls will be in sky-rise buildings. “Basement shopping is not preferred by women and so the malls have to go upward,” he adds.
The trend so far is that most families prefer one floor or at best two-floor shopping. However, customer behavior is changing. The provision of the food court and children’s entertainment areas on upper floors is changing shopping habits too. Families especially are looking for an outing that will involve shopping and dining, and children’s recreation. It’s against the background of this growing need that future shopping malls will offer all these plus a cinema or a theater.
“Our aim is to achieve sustainable projects that respect the environment, reduce the life cycle cost and add to the beauty of the built-environment. We find ways to optimize the design by innovative, practical and cost-effective solutions,” he elaborates.
Among the UPC’s upcoming projects this year are Sharaiah Mall in Makkah and Jubail Mall in Jubail. In 2007, the UPC plans to open Salam Mall in Makkah, Aliat Al-Madinah Mall in Madinah, Yanbu Mall in Yanbu, Dammam Corniche and Dammam Central in Dammam, Tabuk Mall in Tabuk, Khamis Mushayt Mall in Khamis Mushayt and Salboukh Mall in Riyadh. Its projects in 2008 include Aqaria Mall in Riyadh and Andalusia in Jeddah.
The UPC has enjoyed an unprecedented growth since its establishment. Its portfolio now exceeds 1.3 million square meters.
“This activity in the national marketplace provides us with unrivaled market intelligence on new developments, tenants and trends in the property industry. We call this process ‘knowledge management’ and each of our clients benefits from this as we bring to bear our expertise to enhance every aspect of their investments,” he said.
Company services include design, development management, shopping mall management, market research, leasing and tenant mix, mall marketing, property management, accounting and financial services and management facilities.
“The real estate market outlook for the current and coming years is excellent. The boom is set to continue in the next five years with an investment of SR10 billion. Over the next 10 years, the total investment will exceed SR50 billion,” Alawi said.
