The Safari Group used its own funds to build the Dh300 million mall Image Credit: Virendra Saklani/Gulf News

Dubai: A brand new mall has opened in Sharjah with 1.2 million square feet of leasable area. But for now, only three of the 260 stores are operational.

But this hasn’t got the developer of Safari Mall - located in the Al Muweilah area and close to the main universities - unduly worried. “There’s a downturn in the retail sector and retailers are not willing to rush in to lease,” said Aboobacker Madappat, Chairman of Safari Group. “Local operations of some international brands are interested, talks are on with them, but their head offices are delaying decisions.

“This is normal in any downturn - we were prepared for that.”

The reason Madappat is not worried has to do with the mall’s location, close to between 10,000-15,000 homes and a consumer base of more than 200,000 people.

A matter of time

“When you have access to that potential market, retailers will soon start signing the lease terms,” he added. “This is not misplaced optimism on my part - if a developer has a completed project, its prospects increase immediately. We have the proof to show potential tenants.

“Right now, this is Sharjah’s second biggest mall after Sahara - the next few weeks will prove that we got the project right.” (The LuLu Group is also building a mega mall in the emirate, near the cricket stadium.) The Safari Group, which operates a food distribution business in the UAE and hypermarkets elsewhere in the Gulf, is operating a hypermarket across three levels at the mall.

Rentals within the UAE’s retail sector have cooled in the last two years, though retailers say these are still way too high given the market circumstances. According to sources, retail rents in Sharjah would be in the Dh150 a square foot to Dh500 range. But discounts and other incentives are being offered, with the emirate seeing more retail space getting added.

Own funds

The Safari Group used its own funds to build the Dh300 million mall. “Banks are cautious about lending, and more so these days,” the chairman said. “But if that was their attitude, it does not mean we have to slow down.

“Using our funds was the best option in these circumstances.”

It wasn’t the only thing Safari did on its own. It even set up its own construction company to take on the main works to build the mall. “Our in-house company, Oscar Contracting, had about 600 people on its rolls, both our own staff and those on contract,” Madappat added.

“Rather than slow down anything, we managed to complete the project in about 30 months. We even got ourselves into the record books by doing 56 hours of continuous concrete pouring for the foundation.

“Sticking with deadlines, even improving on it, meant we had a tight control on the costs. We never let anything escalate - in this market, that discipline helps.” (Not just the mall, Safari even put in money for a pedestrian bridge to connect the mall from the Shaikh Khalifa Road.

Busy retail calendar It is a busy time for new retail destinations in the UAE. The Galleria Al Maryah Island expansion is adding another 1.4 million square feet to Abu Dhabi’s retail and entertainment space.

Dubai too will have its share of new attractions, at emerging locations such as Dubai Hills as well as established ones such as the Palm.

Busy retail calendar

It is a busy time for new retail destinations in the UAE. The Galleria Al Maryah Island expansion is adding another 1.4 million square feet to Abu Dhabi’s retail and entertainment space.