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Water projects across Saudi Arabia – desalination, wastewater, transmission and storage – are booming. The flow of investment is only likely to increase as barriers to entry fall and the floodgates open to newcomers from across the globe

By SWPC

It will be a busy 2013 for the Doha Festival City project as construction work on the scheme’s main shopping mall starts.

The project is one of the largest retail schemes planned for Doha. Located on the northern highway leading out of the capital, the development will include the mall, an entertainment park, two hotels, a car park with more than 8,500 spaces, and will cover 434,000 square metres. Brands that will open stores at the mall include Ikea, Marks & Spencer, Ace Hardware and regional retailers.

Excavation on the Festival City mall is expected to start during the first quarter of 2013

The Doha Festival City scheme is owned and being developed by Bawabat al-Shamal Real Estate Company, which is supplying the land to build the project. Bawabat has four primary shareholders: the UAE’s Al-Futtaim Real Estate Services, Qatar Islamic Bank, Kuwait’s Aqar Real Estate Investment Company and private investors.

The design work for the mall has already been completed. Excavation is expected to start during the first quarter of 2013. Contractors are in talks with the development team for the main package.

Construction work on other parts of the project is approaching completion. The Ikea store at the city is due to open in March. In October 2011, a joint venture of the local Qatari Arabian Construction Company and Amana Qatar Contracting Company won the first major construction package. The estimated QR300m ($82m) deal was to build the Ikea store covering 32,000 sq m.

The consultants on the project are:

• Design architects: DP Architects (Singapore)
• Architect of record: Arab Engineering Bureau (local)
• Quantity surveyor: EC Harris (UK)
• Project manager: Mace Group (UK)
• Architect (Ikea): Brewer Smith Brewer Gulf (UK)
• Auto park engineer: WSP (UK)
• Market research consultant: Portland Design Associates/Coverpoint Catering Consultancy (UK)
• Leasing and marketing: Al-Futtaim (UAE)
• Development manager: Al-Futtaim
• Investment management: Al-Futtaim

Financing for the project has been secured. In June 2012, the development team completed a QR3.7bn financing deal. Debt is split between a QR2.5bn conventional bank tranche and a QR1.2bn Islamic bank tranche. Both have a tenor of 10 years and are priced at 175 basis points above the Qatar Central Bank reference rate.

QInvest was the financial adviser and the bank group includes Commercial Bank of Qatar, Barwa Bank, Ahli Bank and Al-Khaliji Commercial Bank.