Al Madina, Pension Fund JV to invest in Salalah Grand Mall

By Conrad Prabhu — MUSCAT: FEB 12 – Leading Omani property developer Al Madina Real Estate is joining hands with the Ministry of Defence Pension Fund in the establishment of a Salalah version of its signature Grand Mall project in Dhofar Governorate. Construction work on the Salalah Grand Mall will shortly commence at a site located in Saada, according to a high-level executive of the Muscat-based property firm. “We are looking to replicate the success of the (Tilal Complex which houses the Muscat Grand Mall in Bausher) in Salalah,” said Harith al Brashdi, Chief Operating Officer — Al Madina Real Estate.  “We recently announced the start of the Salalah Grand Mall, and we are looking to break ground in the next couple of months in Saada.”

The Tilal Complex is the flagship property venture of Al Madina Real Estate that also offers a new paradigm for mixed use development in the Sultanate. Anchored by the upscale Muscat Grand Mall (MGM), it is integrated with two hospitality components — the 4-star Millennium Executive Apartments and the 5-star Grand Millennium Hotel. The third phase expansion of the Grand Mall is currently under way and due to be completed before the end of this year. In remarks to the Observer, Al Brashdi said the Salalah Grand Mall project is being implemented in joint venture with the Ministry of Defence Pension Fund.  “We are looking at a mixed use development in the total area, but we will be starting off with the Salalah Grand Mall in Phase,” he stated.

Asked if the project would be funded via a sukuk similar to Al Madina’s landmark Islamic bond offering to finance its Tilal Complex, the Chief Operating Officer explained: “The funding strategy has not been finalised yet.  It will not be a sukuk, however, because for a sukuk, it has to be an operational entity.  In the case of Tilal, it was an operational property (when the sukuk was issued).  For a new development, it will be financing either through an Islamic bank or (conventional) bank.” Complementing the Salalah Grand Mall is a new eco-lifestyle hotel brand called ‘Agarwood’, which is set to make its global debut in Salalah. Part of the Millennium & Copthorne chain, the 286-key resort encompasses a hotel, villas and apartments. Construction work on the property, which is located just across from the Salalah Grand Mall, is currently under way, according to Al Brashdi.

Also under development is a new budget boutique hotel brand called ‘Studio M’, also part of the Millennium & Copthorne chain. The 302-key property is coming up within the Shaden Al Haden property scheme of Al Madina Real Estate in Al Hail in Muscat Governorate. According to Millennium & Copthorne, the brand ‘combines a chic minimalist design, contemporary functionality and hassle-free technology to cater to the new generation of independent travellers’. Earlier, speaking at a real estate forum held in the city recently, Al Brashdi said Al Madina Real Estate was looking to “become more creative in our offerings”.

“Standalone residential is not very attractive for a lot of people, so we are looking at how to become creative.  If it is not going to a be a full-fledged mixed use development like Tilal, what components can be added to a simple residential project to make it attractive, and it comes back to services. Thus if I want to rent out retail, it has to be to someone that will benefit the residential customers, not just to anyone,” he said. Championing the mixed use concept in real estate development, the executive said: “Mixed use has a lot of attraction not only for investors because it diversifies your investment but also for people looking to buy residential units from us or our customers visiting our shopping malls or retail offerings. It allows people to socialise; it allows people to have activities outside of their homes — and that’s the success of the mixed use — allowing people to benefit from the property in different ways… Mixed use replicates a miniature city,” he added.