The right avenue

CW staff , December 19th, 2009

With volatile regional markets and a super-mall on every corner of the region, is Kuwait’s The Avenues a good idea, given the global economic mood?

The construction of Phase III of The Avenues, Kuwait’s largest shopping mall, is steadily progressing in the Al Rai district of Kuwait City.

At a time where most GCC states have experienced a slow down in construction activity, does yet another high-end, fantastic mall project seem viable?

Strangely, yes, seems to be the answer. A fortnight ago, when regional markets dived after Dubai World requested for a freeze on debt payments, Kuwait’s index made its largest one-day gain in four months, suggesting a strong economy, backed by ample sovereign funds and a wealth of untapped natural resources.

The National Bank of Kuwait and Kuwait Finance House added 3.8% and 1.9% respectively, and the country’s index climbed 1.3% to 6766 points.

The latest report by the Oxford Business Group also suggests that the country’s economy is strong and that its real estate market appears to be moving towards recovery, with falling interest rates and increasing confidence, which is helping to lift sales.

And the mall, according to officials working on the project, is definitely securing interest from leading international retail brands on the back of this increased confidence. The mall has been designed, in collaboration, by the London and Los Angeles offices of global architectural practice Gensler. Kuwait’s Mabanee is developing the project. Phase III of The Avenues will consist of more than 86,000m2 of retail space and is scheduled for completing in early 2012.

The development will bring together six elements, including The Mall, Grand Avenue, Soku, The Souk, Luxury Mall and Bazaar. According to the designers, the inspiration was taken from leading retail cities where distinctively different districts can be found side by side.

Once complete, the third phase will house 545 retail units in total, including 52 food and beverage outlets.

“The Avenues is the region’s premier shopping, lifestyle and entertainment destination and Phase III will elevate this offering, positioning it as a world class retail shopping destination, said Chris Johnson, managing principal of Gensler London.

“Truly a retail evolution, The Avenues completely redefines the shopping experience for the consumer; it is as much about place making as it is retail design.

“The scheme takes reference from the great cityscapes and retail locations around the world. These cities emanate vibrancy, character and a diverse range of retail offerings and experiences – a philosophy that leads the Phase III design,” he added.

Located close to the centre of Kuwait City, The Avenues has set a benchmark for high quality retail in the region. Phase I of development opened in 2007 and houses more than 230 retail units. Phase II opened in 2008, offering over 200 higher-end shops, a large food court and outdoor dining venues.

As well as being appointed lead architects on the project, Gensler’s design teams are responsible for delivering the interior design.

“With the success of the initial two phases of The Avenues, seeing them quickly established as the premier shopping and leisure destination within Kuwait, we were looking to adopt a different design approach for the latest extension,” said Mohammed Alshaya, chairman of development company Mabanee.

“The pedigree of Gensler, in providing world class architectural designs, naturally made them the perfect partner for Mabanee as we strive to create another exciting chapter in the continued development of The Avenues. The start of the construction is another milestone for our company, and we look forward to our opening in 2012, offering the population of Kuwait a new and dynamic experience.”

And with the global recovery expected to come around in 2012, the opening of the mall seems to be ideally timed. A report issues by Kuwait Finance House (KFH) in early November suggested a return to positive territory for the country’s real estate industry fuelled by higher spending on the part of the government and an increased involvement of the private sector in public investments.

And though a steady improvement in the property market is expected, outside forces cannot be controlled. With regards to Dubai World’s debt, Kuwaiti lenders don’t seem to have significant exposure to affect them and economic realities are generally trending towards the positive.

In late November, the Finance Ministry announced a $20 billion budget surplus for the first seven months of the fiscal year that began in April. This was a dramatic rise on the forecast deficit of $16.8 billion.

According to a recent report by the National Bank of Kuwait, residential property prices are still edging downward, falling back some 8% annually on a rolling six-month average basis. With the cost of borrowing having fallen steeply, and prices yet to regain their upward momentum, Kuwait’s property market could soon start to attract investors, which in turn could breathe new life into the country’s construction industry.

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Mabanee is a Kuwaiti shareholding company with a paid-up capital of KD46 million. It has been listed under the real estate sector on the Kuwait Stock Exchange since 1999. Mabanee is owned by a prestigious list of Kuwait’s top institutions and high net worth individuals currently exceeding 2500 shareholders. The company operates under three main business lines including real estate, investment and construction.

Design Inspirations

The Mall links Phase III to the existing centre and according to the designer will provide the ‘widest’ selection of fashion trends.

The Grand Avenue has been designed to feel like an outdoor space. It takes inspiration from tree-lined boulevards and major retail centres around the world. The retail facades are a mix of European, regional and contemporary styles whilst the transparent roof allows natural light penetration.

Soku – an acronym for South of Kuwait – takes its inspiration from New York’s bohemian Soho district. Restaurants, cafes and bistros will attract Kuwait’s younger crowd.

The Bazaar takes inspiration from the Grand Bazaar of Istanbul and will house 34 units below ground.

Luxury Mall will house up to 70 high-end brands, including 16 food and beverage units. The focal point will be a 21m high central dome.

The Souk provides space for small start-up retailers. Modelled on the customary Kuwaiti Souk, this district is an interpretation of traditional regional retail architecture, including narrow streets.