Retail International® Global Shopping Centre Consultants

EGYPT

Q3 2011

In Egypt, and Cairo in particular, the market at the start of 2011, looked to be especially active. Mall of Arabia a super regional mall of some 180,000sq.m located in Sixth October City opened its doors to the 1^st phase. Nearby the high end Designopolis was already trading and a second phase imminent.

Still in the west of the city MAF Shopping Centres were reported to be finalizing plans for the Mall of Egypt, a 160,000 sq.m 'clone' of the Mall of the Emirates, Dubai scheduled to open in 2014. Dandy Mega Mall one of the first malls in Cairo, had completed enlargement to 90,000 sq.m and signed up Marks & Spencer in the process. In all West Cairo was on target to achieve the 1-million sq.m mark of GLA by 2020.

This situation was being mirrored in East Cairo with a similar potential GLA over ten years. Al Futtaim Group's Cairo Festival City in New Cairo leads the pack. A 160,000 sq.m mega mall along the lines of its sibling, Dubai Festival City. Anchored by their own in-house brands such IKEA and Marks & Spencer, Al Futtaim surprised the market by signing up Carrefour as the hypermarket anchor from its family rival Majid Al Futtaim. The latter's Maadi City Centre suffered severe damage in the unrest and remained closed for two months after a reported $34million of damage.

Following the uprising and change of government, a number of developers - especially from outside Egypt - are taking stock of the situation or have even cancelled projects. Thus some rowing back from the potential 2 million sq.m. GLA for Greater Cairo by 2020 will be required, unless restarts or substitutions are made to redress the balance. In June Majid Al Futtaim Holding was reported as 'vowing to push on with its Egypt expansion' in the wake of talks with the new government, only to reveal in September it had slowed the pace of investment in Egypt.

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SYRIA

Q3 2011

There is significant unrest in Syria. Considered by many to offer long term potential a number of major mixed use and shopping centre schemes have been slated for Damascus and Aleppo. Setting the pace Majid Al Futtaim Holding which, despite the political turmoil, in August announced it had begun work on its $1bn mixed-use development located at Sabboura, 17km west of Damascus. The project will include the largest shopping mall in the Levant, Khams Shamat Mall with more than 200,000 sq.m GLA. Come September the media reported that development activity had been curtailed in the country this year. Others are sure to follow what MAF does over the coming months. Supply therefore in the two main cities seems likely to remain static at around 100,000 sq.m for the coming year.

"Build It and They Will Come - No Longer an Option" by Simon Thomson CRE, Founder & Principal of Retail International®

October 2011 If there was any likelihood of "the build it and they will come" syndrome reappearing with improving economic conditions following the 2007/2008 sub-prime crisis, this was truly laid to rest on 3^rd March 2011.This was the day when a 26 year old street vendor from the small Tunisian town of Monastir set himself ablaze in protest at the bureaucratic hindrance in his work. Few then could have predicted, like the blaze itself, that this single act would be the spark of a revolution that in weeks would have engulfed much of North Africa, parts of the Levant and the Arabian Gulf. Even fewer would venture to assess the outcome in 2012 of what has now become known as "The Arab Spring", while so much "unfinished business" remains in the likes of Yemen, Libya, Egypt and their neighbours.

Set against the OECD reporting economic recovery coming close to a halt in the major industrialized economies, with falling household and business confidence affecting both world trade and employment, Greece "bankrupt" and the Euro Zone in turmoil not to mention uncertainty as to the outcome of the US Presidential Elections in 2012, the international political and financial climates are now major issues to be confronted by any prospective mall developer in the MENA region. Where once demographics coupled with demand and supply were the major considerations for those who bothered with such matters, the prospect of gathering international storm clouds can not now be shrugged off quite so lightly on the basis of build it and they will come where the 'they' are tourists and other punters from the west.

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