The developer of Doha Festival City shopping mall has formally awarded a QR1.65bn ($453m) contract to a joint venture of local firms Gulf Contracting Company and Alec Qatar to build phase two of the mall.

In January, the joint venture was hired to start work on the foundation of the scheme’s main shopping mall, which is scheduled to open in the third quarter of 2016.

Phase one of the development was completed in March 2013 and included the construction of Qatar’s first Ikea store. The mall will offer more than 550 brands, many of which will be making their debut in Qatar.

In October 2011, a joint venture of the local Qatari Arabian Construction Company (QACC) and the local Amana Qatar Contracting Company won the first major construction package for the mall. The estimated QR300m contract involves building an Ikea store covering a total area of 32,000 square metres.

Located on the northern highway leading out of the capital, the development will include the main shopping mall, an entertainment park, two hotels and an automotive park with car showrooms. The complex will cover a total area of 433,000 square metres.

The Doha Festival City scheme is owned and developed by Bawabat al-Shamal, the parent company, which is supplying the land to build the project. Bawabat al-Shamal comprises four primary shareholders: Al-Futtaim Real Estate Services,Qatar Islamic Bank, Aqar Real Estate Investment Company and a private company.

The developer completed the QR3.7bn ($1.6bn) financing for the development of the Doha Festival City mall in June 2012. Debt is split between a QR2.8bn conventional bank tranche and a QR1.2bn Islamic bank tranche. Both have a tenor of 10 years and are priced at 150 basis points above the Qatar Central Bank reference rate.