Dubai's great shopping mall race (page 1 of 3)

It's the kind of company that students in business schools around the world dream about. Since it was launched in 1992, the Dubai-based Majid Al Futtaim (MAF) Group has registered meteoric growth, making it one of the top businesses in the United Arab Emirates.

Today, the MAF Group is active in businesses ranging from automobiles to financial services, from entertainment to tourism. But the group's strongpoint is its retail and shopping center activity, which began in the mid-1990s with the opening of Deira City Center, the largest shopping mall in Dubai. The mall quickly climbed to the top spot, displacing several established players in the sector.

The second stellar performer in the MAF group is its tie-up with France's Carrefour, the second largest retailer in the world. MAF has obtained exclusive franchises for Carrefour in the Gulf and has been opening stores rapidly in the region. Having obtained the right kind of business deals, Majid Al Futtaim set out to get the right kind of people to execute those deals.

To head MAF Investments - the key vehicle for looking after the shopping center business - Futtaim brought in Peter Walichnowski, an Australian who had been making waves in Britain by having brought to life London's famous Bluewater mall, Europe's largest shopping center.

Al Futtaim set a challenge for Walichnowski: to build a mall in Dubai that was even bigger and better than the one he had built in London. That is the mission for Walichnowski, chief executive officer of Majid Al Futtaim Investments, the investment arm of one of the largest business houses in Dubai.

Walichnowski recently oversaw the launch of the construction of Mall of the Emirates - the biggest project ever undertaken by MAF Investments. Formerly called Souk Al Nakheel, the project involves an investment of over 3 billion dirhams (about $850 million).

Located in a newly developed part of Dubai, the Mall of the Emirates will measure over 6.5 million square feet in total area and 2.4 million square feet in leaseable area. It will house 350 shops, a huge hypermarket, a 12-screen cinema and parking for over 7,000 cars. As well, the mall will include the world's biggest indoor ski resort, which will feature real snow.

However, within days of the launch of work on the Mall of the Emirates, another, even bigger project was announced in Dubai, barely a few kilometers from the location of the MAF project. Emaar, the government-owned real estate giant, announced its own venture into the business of shopping malls.

Emaar's complex will have the world's tallest tower as well as the world's largest shopping mall, sitting side by side. Ibrahim Al Hashemi, executive director in the retail and leasing department at Emaar Properties, says that the Emaar project has received over 1,000 trade inquires from potential retailers since the project was announced.

"We have been inundated by inquiries from around the region," he says. "With a footfall projection of 35 million shoppers in the first year of operation and projections for an annualized growth in mall traffic of about 20-30 percent, it is no surprise that the region's retailers have spotted a lucrative opportunity.''

These two malls - which between them will add nearly 5 million square feet of retail space - are not the only ambitious new projects in Dubai. In the past year, two new shopping malls have opened in Dubai, while two more well-established malls have massive expansion plans.

Al Ghurair has completed its expansion, which has seen a 12-screen cinema and 140 shops set up in the mall.