MEED: What are some of the key projects in your portfolio, and the key schemes currently being developed?
Mohammed Al-Saqqaf: We have several projects in our portfolio that are worthy of mention. They include the recently completed and now operational Salalah Gardens Mall (SGM) and Kipco Tower. SGM is the first mall in the city of Salalah [in Oman], and Kipco Tower is the first development to combine retail, residential and commercial components within a single building in the heart of Kuwaits financial district.
Also in our portfolio is the Marina scheme, which began operations in 2003 and remains an iconic destination in Kuwait for retail, dining and entertainment.
Of the projects under development, two notable ones are Abdali Mall in Amman and Junoot resort in Oman.
Abdali Mall is part of the masterplan development for the new downtown of Amman. The mall has unique open-air features, with 73,000 square metres of gross leasable area, including a large number of retail shops, an entertainment centre and 11 cinema screens. The completion of Abdali Mall is expected in the first quarter of 2015. As for Junoot, it is URCs first project that is conceptualised around sustainable and ecological values. The schemes anticipated start date is the first quarter of 2014.
Your portfolio includes retail, hospitality and residential projects. Which of these sectors offers the greatest opportunity for growth at the moment?
Our retail portfolio in the Mena [Middle East and North Africa] region has indicated the highest growth potential. A young demographic profile combined with rising per capita income will be the primary catalyst.
Oman continues to be an attractive retail destination with steady economic and retail growth, and strong consumer confidence. A recent report by the US AT Kearney noted that the Omani retail sector still remains largely untapped considering the limited modern retail opportunities outside Muscat. Our new mall in Salalah would provide us the first-mover advantage in this regard.
[Kuwaits] office market is bottoming and might offer prospects if the absorption of current supply stock accelerates
Likewise, Jordan remains attractive for retailers despite the political turmoil in neighbouring Syria. In general, there is no single sector that is favoured across various geographies. It is all dedicated by supply and demand drivers, as well as the macroeconomic factors of any particular geography.
What is your assessment of the real estate sector in Kuwait?
Real estate is a very specific asset class and therefore we should segregate between which sectors of real estate we are addressing.
For example, the office sector was severely hit in the past five years due to oversupply in space and a domino effect of the global turmoil that caused significant downsizing for many firms. On the other hand, the residential property market continued to increase in value due to limited supply and a growing young population pursuing the housing market.
However, we believe the office market is bottoming and might offer prospects if the absorption of current supply stock accelerates.
Are there any particular countries you are eyeing for expansion?
Saudi Arabia is one of the countries we are looking into for new business development opportunities. It is a market we have not yet initiated development in, but it is part of our mid-term strategy.
What are the biggest risks or threats that you perceive to your business?
There are always risks associated with any business, and the significance of the risk depends on the level of exposure. The stability in our region has unfortunately been unpredictable in the past few years, which has affected the sales activities of some of our residential projects.
Yet the diversification in our portfolio has allowed us to withstand the situation and take advantage of the opportunities that arise in such conditions. We anticipate that the situation will remain unpredictable for the immediate future, and we always try to look for the silver lining in these conditions.