Kim McInnes, CEO – Shopping Malls, Majid Al Futtaim Properties talks about upcoming developments and the rationale behind being the leading GCC investor in Oman in an exclusive interview
How has Majid Al Futtaim’s experience been in Oman in the retailing arena?
Majid Al Futtaim has always been pioneering in the Omani market, and we renewed our commitment to be the leading GCC investor in the Sultanate by announcing our RO705mn investment, which includes the development of Mall of Oman, City Centre Sohar, and My City Centre Sur, as well as additional investments from our retail, leisure and entertainment businesses. The continued investment in Oman’s retail and leisure infrastructure by Majid Al Futtaim supports the country’s National Strategy for Tourism 2040, which targets a six per cent rise in the contribution of the tourism sector to the GDP and a near doubling of visitor numbers to five million annually. The plans build on the company’s existing developments in Oman including City Centre Muscat, which received a RO35mn expansion in 2015, City Centre Qurum, which opened in 2008, and Al Mouj Muscat. Together, since 2001, these three existing developments have seen Majid Al Futtaim invest more than RO190 million and generate more than 23,000 jobs in their construction and operation.
Can you give us a brief background on City Centre Muscat and Qurum along with their recent expansion and future plans?
Majid Al Futtaim invested RO35mn in the expansion of City Centre Muscat, which was completed in November 2015. We enhanced City Centre Muscat by incorporating 60 new stores, 12 of which we brought to Oman for the first time. We also expanded the mall’s VOX Cinemas and Magic Planet and improved its sustainability and accessibility. The expansion has delivered a substantially more impactful customer experience. The feedback from visitors and retail partners has been overwhelmingly positive.
Majid Al Futtaim is investing rial Omani five million to expand City Centre Qurum. The revamp will see the introduction of Centrepoint, the multi-brand retail concept, as well as additional car parking spaces. The project is expected to be completed by the end of 2016. When finished, City Centre Qurum will have approximately 26,500 sq.mtrs GLA, offering more than 14 diverse dining options, 83 retail destinations and distinct entertainment options, including Magic Planet and VOX Cinemas.
The group plans to build the Mall of Oman. Can you share your plans regarding the mall?
Mall of Oman is on track in its construction plans; we are aiming to begin construction this year and will keep our stakeholders and the media apprised of our progress. Mall of Oman is set to transform the retail landscape in the Sultanate. It promises to be Oman’s leading retail and leisure lifestyle destination, offering a truly exciting environment for the entire family, all in a stylish and contemporary setting that reinforces Oman’s rich architectural heritage.
Majid Al Futtaim is creating Oman’s first snow park – an 8,000 sq.mtrs play area unlike any other in Oman – around which there are more than 350 retail outlets, 20 dining choices, a 12,500 sq.mtrs Carrefour, a 19-screen VOX Cinemas, and more than 8,000 sqm of family entertainment at Little Explorers and Magic Planet. At 137,000 sq.mtrs of gross leasable area, Mall of Oman is set to be the Sultanate’s largest and most compelling retail and leisure destination. Majid Al Futtaim is investing RO275mn in Mall of Oman. The project is expected to generate 14,190 direct and indirect job opportunities.
Majid Al Futtaim is also building a City Centre in Sohar, when is this expected to be completed?
City Centre Sohar will be a regional mall featuring 100 retail outlets, including a 7,400 sq.mtrs Carrefour hypermarket, and entertainment options such as VOX Cinemas and Magic Planet. It will be completed in 2018. It will be located on Batinah Highway around 500 metres northwest of Sallan roundabout. The site benefits from an attractive location along the main commercial road that runs through Sohar and connects to most parts of the city and further to Muscat towards the south and to Dubai towards the north. The communities that will benefit from the new destinations are: residents from Sohar city, neighbouring villages that are part of Sohar Wilayat, and the Wilayats of Shinas and Liwa on the north and Saham and Khaburah on the south.
Some of its Highlights include:
40,262 sq.mtrs of GLA
12 state-of-the-art VOX cinema screens
Magic Planet – family entertainment centre
7,400 sq.mtrs Carrefour hypermarket
1,300 parking bays
City Centre Muscat and Qurum have emerged as entertainment, leisure and shopping destinations thanks to Vox Cinemas, Magic Planet and shops with premium brands. Is this the model for your future retail activities in Oman?
Majid Al Futtaim is the region’s retail pioneer, offering visitors complete lifestyle experiences with world-class shopping, dining and entertainment. We place the consumer at the core of our business model, developing our malls based on customer experiences. Majid Al Futtaim malls’ unique tenant mix attracts tourists as well as residents and the model aims to increase consumer dwell time rather than focusing on how many people come through the doors.
How much is the Majid Al Futtaim investing in Oman and how will it help the Sultanate’s economy?
For the last 15 years, Majid Al Futtaim has been a pioneer committed to delivering premium retail and lifestyle experiences in Oman (City Centre Muscat, City Centre Qurum, Al Mouj, VOX Cinemas), and has a strategy in place to further invest more than RO515mn boosting total investment in Oman to RO705mn by 2020. With a long-term vision for Oman’s retail sector which aligns with the government’s tourism and economic aims, Majid Al Futtaim is targeting significant growth, supported by diversification, infrastructure, and job creation. Building on the history and tradition of robust trading ties between the UAE and Oman, Majid Al Futtaim began investing in the Sultanate more than 15 years ago with the aim of delivering previously unavailable retail and leisure experiences to both residents and tourists. Through our existing assets, City Centre Muscat and City Centre Qurum, we have introduced a number of ‘firsts’ and new brands to the market, developed a skilled retail and operational workforce, which includes a significant number of Omani nationals, and elevated the customer shopping and entertainment experience to a premium level. With a further RO411mn actively invested in the Sultanate, through the development of City Centre Sohar, Mall of Oman and My City Centre Sur, as well as the expansion of existing projects in our retail and entertainment businesses, our contribution to the local economy will only increase in years to come.
Does the market have the ability to sustain numerous malls?
In addition to Majid Al Futtaim’s own research on Oman’s retail sector, other sources including the Oxford Business Group, indicate that the Omani retail sector has grown by seven per cent since 2011 and continues to expand, as large construction projects, predominantly malls and hypermarkets, look set to add more retail space to the sector.
The rise in the number of shopping malls, currently numbering 16 in Muscat alone, has coincided with a shift in spending patterns as the population becomes wealthier, while an increasing number of high-net-worth individuals has led to the growth of luxury and fashion brands and the emergence of niche market concepts, such as smaller-scale, high-end retail centres. Although spending patterns have been shifting as lifestyles change, the Omani consumer price index shows that a large portion of household spending still goes towards food and related products, a trend reflected in the steady growth of hypermarkets.