Interview with Majid Saif Al Ghurair (page 1 of 2)

Q. How do you see 2004 evolving for your group of companies? Which of the businesses has the brightest prospects for this year?

A. The UAE economy in general is doing extremely well, and, as you know, the real estate sector is booming. We have exploited that opportunity by capitalizing and growing the group in this important sector.

We are building new properties for the market and are also looking for new ideas concerning development in the area.

Q. Can you tell me more about your expansion plans? What kind of plans are they and when will they be completed?

A. Our existing shopping mall in Dubai - the Burjuman Shopping Mall - has a retail area of 300,000 square feet. We are expanding that to 750,000 square feet.

Hopefully, the project will be completed by March or April of this year. We're adding three towers - two are residential towers containing 170 apartments - and we are also going to have an office tower with 300,000 square feet of leaseable area.

We are also building another shopping mall on the other side of the city - the more expensive side - which will also have about 260,000 square feet of retail space. We are focusing on retail because, as you know, Dubai has become a shopping destination for all the neighboring countries. The Gulf Cooperation Council [GCC] countries, Iran and India all go shopping in Dubai.

Q. I understand that Burjuman's expansion is somewhat behind schedule and that there are some financial problems. Have you overcome these challenges?

A. There are no financial problems. But, as you know, in construction there are always administrative delays. New tenants may need to alter or expand their retail space, for example.

We were scheduled for January, but you have to consider the size of the project. We are building 4.4 million square feet of retail space, with four underground parking levels, ranging from 800 to 3,300 spaces. This is why the project went over schedule by two to three months. But this is normal in construction.

Q. The retail business in Dubai is about to be turned on its head. Plans for at least three new malls have been announced or are already under construction. How do you see Burjuman competing in this new environment?

A. There are 5 million square feet of retail space presently available in Dubai. In the next three to four years, another 10 million square feet will come up.

The market will be saturated. Two or three years back, shopping malls were really driving the market and dictating prices. Now, it is the other way around: retailers have the upper hand.

It's a cycle. This year, there will be a lot of spaces, but there are not many shopping malls. How are they going to work? The smaller ones are going to suffer.

In Dubai today, it's a fact that there are only three malls out of 23 that are really successful. Does that mean that there is oversupply in the market?

Maybe yes, maybe no. It depends how many tourists Dubai manages to attract. As you know, the airport will soon be expanded, so the number of visitors should increase dramatically. If it does, then it's fine. But if it doesn't, then, yes, there will be a problem.

If a new market suddenly opened up in the region, in Lebanon or Iran, say, it would have an effect on Dubai. But, in the near future, I don't see anything happening. We are benefiting from that fact that nothing is going on around us, which means that Dubai is a destination for several hundred million people.