The retailer responsible for many of the UAE's biggest malls posted impressive revenues for the first half of 2013, and Gillian Duncan of The National examines how its growth throughout the Middle East is responsible for the success of UAE's wealthiest citizen.

Majid Al Futtaim Holding, the retailer behind many of the UAE's biggest malls, posted revenues of Dh11.3 billion in the first half of the year, up 10% on the same period in 2012.

At the same time, the company's earnings before interest payments, tax, depreciation, and amortisation grew by 11% to Dh1.6bn.

In the UAE, tenants' sales grew 10% in the first half compared with the same period a year earlier, while Carrefour sales rose by 7%, and the average occupancy of the company's hotels stood at 88%.

Abroad, the company recorded revenue growth of 11%.

"Basically retail is doing quite well across the region," said Iyad Malas, the chief executive of Majid Al Futtaim Holding, which owns malls across the Middle East, in the UAE, Bahrain, Oman, Egypt, and Lebanon. Even revenues at Majid Al Futtaim's malls in crisis-hit Egypt were up 7%.

"At the end of the day, the average consumer still wants to go out, and eat, and buy food, and clothes. What is very important though, is positioning. In Egypt, we don't have luxury brands. We have a real mid-market offering, and the malls in Cairo, and Alexandria, are primarily anchored around Carrefour being the main store, and some other stores around it," said Mr. Malas.

It opened its twelfth shopping mall in Beirut, called Beirut City Centre in April, and added three new cinema sites, two new Carrefour hypermarkets, and four new supermarkets in the first half across the region.

In May, the company also bought the 25% minority stake owned by the Carrefour Group in Majid Al Futtaim Hypermarkets, while renewing its exclusive franchise partnership with Carrefour group until 2025, and adding new formats and countries. Majid Al Futtaim Holding has a balance sheet with assets of more than Dh39bn, with a net debt of around Dh8.6bn. It plans to partially fund the US$683 million share purchase from Carrefour through a perpetual hybrid security, which it had originally slated to issue in June, but kept it on hold amid volatile regional bond markets.

"This funding strategy allows us to preserve our debt capacity for our ongoing business expansion plans, in line with our prudent financial management approach and commitment to our BBB rating," said Mr. Malas.

"The investor feedback to the proposal has been quite positive. The market conditions in the last few weeks have been volatile and we are waiting for a receptive window for this issuance. There is no change to our intention to issue the hybrid security," he added.

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