The entrance to Circusland in Doha, Qatar
The sharp business sense of Micky Jagtiani, Chairman of
the Landmark Group, has never built “palaces” for his Fun City chain – now standing at 16. His locations have always been more restrained and certainly aimed at ROI. He now has Silvio Liedtke (formerly Magic Planet) in to mastermind their further development and Liedtke has a whole raft of investment planned, mainly outside of the UAE, but never the vast tributes to wealth that once dominated the region. Some do pay, however. Sega Republic at the Dubai Mall,
run by Emaar, made over 54m. dirhams profit last year (€11m.) against a trend, but the level of investment has been huge. The fabulous Gondolania in the Villaggio Mall, Doha, Qatar, run by Michel Koborsi, made a €2m. profit in its first year: “I hoped to break even, so this is a superb result!” Kidzania, a high-cost edutainment location in the Dubai Mall, is rumoured to be on the move and between six and 10 outlets are to be built in Egypt. In Saudi Arabia, the banks are holding back investment,
but some operators are managing to sustain new projects. The biggest, Al Hokair, has a new location in Abu Dhabi on the way and others in different parts of the Middle East. Main rivals Al Othaim are also planning some projects in the coming year. Operating incomes appear to be varying between what
one might call the “B” and “C” malls where FEC revenues are slightly down and the “A” locations where revenues have held their own. In 2010 the best locations were generally about 3 per cent down and the medium and smaller centres 12-17 per cent down year on year. The dream 20 years ago was to bring long-stay factors
developing nations in the region. We will see many of them settling in Egypt where there is a buoyant real estate business – always a good barometer of the FEC trade – and many will re-settle in Qatar for the boom which will come over the next 10 years as the country moves towards the World Cup.” What will actually happen to the FECs in the interim is also
interesting. The great “golden palaces,” tributes to wealth, that dominated FEC development in the past 20 years may be pegged back. There is plenty of evidence that cost – and especially cost per square foot against potential income – is now a factor. Once, developers built huge FECs as a tribute to their own vanity rather than because the local clientele of the shopping malls could support one. That’s gone. Arnaud Palu, COO at Majid Al Futtaim Leisure (Magic
Planet): “I think the days of palaces are over. Everyone must now take a far more subjective view. A new location must be costed from inception, before building even begins.”
into the emirate, a shopping festival and international sporting events, prime retail and hotel locations, encouraging people to use Dubai more as a holiday destination than a two-day stop-over. The Shopping Festival in Dubai is a fact now and lasts
a month. It brings huge numbers in from the 250 million population in the surrounding countries – and many of them end up in FECs. But it isn’t all about Dubai with its Shopping Festival, the Burj Al Arab and the Burj Khalifa, or even the UAE. That market is now mature, with 50-plus major FECs. The real movers and shakers in the Middle East are looking further afield, to the big population centres of Egypt, Syria, Iraq and Saudi and commercial crossroads like Beirut. As the region moves out of recession – and assuming
that the drive on democracy remains largely peaceful and safely transitional – then the industry’s ability to reinvent itself and reinvest in itself will re-emerge.
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