Site visit: Doha Festival City

Doha Festival City is set to become ME premier retail destination

ANALYSIS, Site Visits, Projects, Doha festival city
IKEA has proved a smash hit.
IKEA has proved a smash hit.
ANALYSIS, Site Visits, Projects, Doha festival city

The construction of Phase 2 of Doha Festival City (the main mall) might just be visible above ground level at the moment, but it is clear from the already built footprint of the site that this will not just be a run-of-the-mill project.

The site is around 1km long by 600m wide, and is the largest mixed-use development currently under construction in the Middle East. When it is completed in September 2016, it will stand as the biggest retail destination in Qatar – not an insignificant feat in a country where the sector is experiencing a real boom.

Having completed the project’s Phase 1 (IKEA) in March of 2013, the main mall’s enabling works contract was awarded to a joint venture (JV) of Gulf Contracting Company and ALEC Qatar in January 2014, comprising the basement and ground floor construction.

Then in May 2014, Bawabat Al Shamal Real Estate Company (BASREC) – the owner of Doha Festival City – appointed the JV as the main mall’s structural frame, MEP and finishes contractor in a deal worth $453mn.

While the companies that form the JV have only been working together for a relatively short amount of time, Theuns Erasmus, project manager on the site, said that the firms have proven to complement each other well in their work so far. In part, he puts the success down to a shared outlook and approach.

“The reason the JV has proven to work well is because of the culture of the two companies - they are very similar. The background of the leaders of the companies is very similar. Gulf Contracting Company’s general manager Grahame McCaig comes from Grinaker LTA (a South African engineering and construction company) and ALEC’s CEO, Kez Taylor, does as well.

“Culture wise, that’s why the JV works. Coming to this region was quite a challenge for ALEC to begin with, but what shortfalls we’ve got, with resources for example, GCC has been able to assist, as they have the local knowledge of the industry and the supply chain, while they also have their own plant facilities.

“By the same token, ALEC has come into the project with experience of malls, such as Mirdiff in Dubai, which was one of the first malls that had the vast majority of its shops already open at the same time as the mall opening. What you often find is that a mall will open and have a number of empty units, so that is what we want to be able to avoid here.”

Taking a walk across the vast site, it’s easy to see that a great deal of work is being carried out, with hundreds of workmen spread out across the location in a northern suburb of Doha. At the time of writing, the JV is waiting for the green light to begin building the mall vertically, up to its full two storey height.

“We are currently preparing for the second stage of building and that is dependent on achieving DC2 approval from the Government. With the footprint of the building, there are always areas to work on, although it’s true that with horizontal projects, you want to go as quickly as you can towards the roof. There are many places where we can now commence with vertical construction, and DC2 approval is something we foresee happening quite quickly,” says Erasmus.

“There is a close working relationship between the contractor and the client (who has a permanent office at the site). The client has been really transparent, which is obviously a huge advantage and helps to make a project more efficient.”

“We sit down weekly with the Development Manager and have meetings where we speak about the challenges and issues and that’s how things get resolved.

It’s those meetings that make a project work, as we can talk about any challenges we are having and find a way to resolve them. The combined team of client, project manager and contractor is fully focused and committed to a timely delivery of the project.

“And just like us, they feel strongly about HSE, and that is shown on site. We walk through the site each week and check all of the areas. It’s a big site, so we take four hours each week to thoroughly check what is going on from a health and safety perspective.”

One of the challenges that will face Doha Festival City is the number of retail developments currently under construction in Qatar. Indeed, the journey from the centre of Doha to the site on the Al Shamal Road is punctuated by shopping centres and mall complexes that are at various stages of construction.

While Qatar currently has 13 operational commercial malls, according to local real estate consultancy Al Asmakh Real Estate Development Co (AREDC), this number is set to double by 2018 with another 13 mall projects creating a net leasable area as high as 1.72 million square metres. Of that total, four new and two existing malls, comprising 650,000m2, are located on Al Shamal Road.

The impact will mean a growth in organised retail space within Qatar from 285m2 for every 1,000 people to 900m2 per 1,000 people. At present the region’s leading shopping hub, Dubai, offers 1,380m2 in retail space per every 1000 residents, while in the US this figure sits at 1,030m2 per 1,000 people.

Competition, therefore, is going to be stiff. But before Doha Festival City opens, it already has an ace up its sleeve in the form of the IKEA store that already sits in the development. Opened last year, the store attracted around 1.4mn customers during its 12 months in business.

As well as the famous Swedish furtniture store pulling in the crowds from miles around, the development will also comprise 550 outlets, a 16-screen cinema and an indoor-outdoor entertainment park, as well as the city’s first mall with an integrated hotel and conference centre. In addition, the mall will offer an outdoor cycling track, while it is hoped that a globally renowned anchor department store will be announced in the third quarter of 2014.

“This is a really good location as Lusail is just ten minutes down the road, and a lot of World Cup development will be in the area. We also have Ikea already here and that is a really good attraction for families, people drive from miles around to shop there.

I think there’s going to be a really good mix of retail in the mall and the entertainment zone will be a real crowd puller,” comments Erasmus.

“There will also be a snow slope in the entertainment zone, so that’s something that will attract people. I think the mall will be a really family orientated destination, and with the cycling track around the mall, it’s something that parents and children will be able to enjoy.”

The project will also house an integrated hotel, as seen in landmark malls in the United Arab Emirates, such as Dubai Mall and Mall of Emirates. While an operator is yet to be announced, Doha Festival City CEO Kareem Shamma recently told Construction Week Qatar’s sister title, Arabian Business Qatar, that it is close to signing an agreement with a well-known international brand.

It is thought that a 465-room five star hotel will serve a predominately business market, but will also attract plenty of leisure guests as well.

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