Dubai-based Majid Al Futtaim, which develops shopping malls in the Middle East, is “bullish” about the outlook for business in Oman.
It is forging ahead with the construction of its $13 billion (5bn Omani riyals) Tilal Al Irfan urban development project in Muscat, with the first phase scheduled for completion in three years.
Majid Al Futtaim plans to invest 1.25bn riyals every five years over the project’s 20-year span, depending on the speed of the real estate market’s recovery, Ahmed Galal Ismail, chief executive of Majid Al Futtaim Properties, said on Monday.
Construction on the project has started and infrastructure works are under way.
The contracts that have been awarded will be announced soon, Hawazen Esber, chief executive of Majid Al Futtaim Communities, said. The first phase will deliver homes, a school, a hospital and a new business district for Muscat.
“We continue to be quite bullish about the future for Oman and we play a role in the recovery and reshaping of real estate,” Mr Ismail said.
Oman’s economy is projected to grow by 2.5 per cent, after a contraction of 2.8 per cent in 2020, as the distribution of a Covid-19 vaccine helps domestic activity and external demand picks up, the International Monetary Fund said on September 12.
The economic recovery will be led by 1.5 per cent growth in non-oil activity this year, compared with a 3.9 per cent contraction in 2020, the Washington-based fund said.
The sultanate’s fiscal deficit is set to decrease to 2.4 per cent of gross domestic product this year, from 19.3 per cent of GDP in 2020, and is expected to turn into a surplus in 2022, the IMF said.
Majid Al Futtaim, which opened the Mall of Oman in Muscat on September 1, said the sultanate was its first international foray beyond the UAE about 20 years ago.
Majid Al Futtaim’s total investment in Oman reached 705 million riyals in the past two decades and it will look to continue investing in the country, Mr Ismail said.
Since its opening, the Mall of Oman is 80 per cent leased, said Shireen El Khatib, chief executive of Majid Al Futtaim Shopping Malls.
By the end of the year, it aims to have 60 per cent of its 300 stores operational. Its Snow Park is expected to open within 12 to 18 months, she said.
Majid Al Futtaim reported a 2 per cent increase in its first-half earnings as the region’s economic recovery continued despite the impact of the Covid-19 pandemic on its business.
Earnings before interest, taxes, depreciation and amortisation, or Ebitda, rose to Dh1.6bn ($436m) in the first six months of the year, the privately held company, which discloses its performance, said.
Its property arm recorded a 6 per cent increase in revenue to Dh1.6bn. Ebitda for the first half of the year also climbed 6 per cent to Dh1.1bn as the company opened its City Centre Al Zahia mall in March this year.
Commenting on the outlook for the second half of 2021, Mr Ismail said he continues to see “recovery momentum gathering pace” and that tenant sales have recovered “close to pre-pandemic levels” in many categories.