BurJuman expansion project running late (page 1 of 3)

Burjuman Center - which opened for business in 1992 and is described by its owner, Majid Saif Al Ghurair, as "a high-end mall, a mall for serious shoppers" - is a destination shopping center, a place where Dubai residents congregate as much to socialize as to spend their money.

Burjuman's 1.4 billion dirham ($381 million) expansion, which was originally scheduled for completion in December 2003, will clearly add to the mall's appeal. The mix of prestigious brands - including a flagship Saks Fifth Avenue (SFA) department store, more than 300 other shops, restaurants, cafés and a multi-screen complex - will undoubtedly attract hordes of upscale clients.

As well, Burjuman has embarked upon an unprecedented marketing campaign, placing promotional billboards in Manama, Riyadh, Jeddah and even London. The current effort to promote the mall, while perhaps overly ambitious, can't really be faulted: it will certainly help boost the mall's image - and the number of visitors - when the expanded version of Burjuman opens its doors.

Indeed, the main problem with Burjuman is not the future; the problem is the present. Burjuman's much-hailed expansion - which will have a total area of 4.4 million square feet, including a 22-story office tower and a residential complex - has been repeatedly delayed.

Back on March 10, 2003, a pair of Dubai dailies ran features on the project. "Burjuman expansion nears final stages," ran the headline in Khaleej Times. The same day, rival Gulf Today announced, "Expanded Burjuman to be ready by mid-December."

Both, of course, were later proved wrong about the timing of the expansion. Curiously, both these stories (which serve only to highlight delays in construction) are still available in the press clippings section of Burjuman's own website.

One has to assume, then, that Burjuman management never looks at its own site, or simply doesn't think that anyone will notice the discrepancy between these stories and reality. It's difficult to decide which is worse.

The expansion of Burjuman first got stalled over a design issue - a factor that delayed construction by nearly a year. Then, when construction restarted, the expansion project encountered still further delays. As of mid-April 2004, the new Burjuman Center remained a hardhat only area. And that led to a tense dispute between mall management and frustrated retailers - whose settlement will cost Burjuman prestige and profits.

Retailers, many of whom had planned to open at the end of 2003, continue to watch the weeks and months pass without cash registers ringing. Not surprisingly, they want compensation. At the top of the list is Saks Fifth Avenue, the American retail giant that already operates a shop in Saudi Arabia and has booked 80,000 square feet of retail space in Dubai.

Burjuman management has been trying to reassure retailers that the mall will be open for business before the end of the year, and that the delay was caused by factors beyond its control. But these reassurances have failed to placate everyone, especially Saks, which has demanded compensation for the delay.

"We have complete sympathy for our tenants regarding what has happened to delay construction for almost six months now," said Burjuman's general manager, Eisa Ibrahim, on April 20th. "We held a gathering of tenants in February, and we told the tenants who have sustained losses that we are ready, willing and able to compensate them. We are looking into this case by case. During the discussions, we told tenants that we would offer them a three-month rent-free period.