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CAIRO’S WEALTHY WON’T NEED TO LEAVE CITY TO SHOP

By Donna Mitchell

Citystars Heliopolis Cairo will bring some European retailers to Egypt for the first time.

Residents of Cairo, Egypt, and wealthy vacationers can count on getting almost whatever they want in this packed, bustling city. There are grand second homes, posh hotels, restaurants, casinos and nightclub life. What they don’t have, though, are top-notch international retail shops.

Local commercial development company Golden Pyramids Plaza is intent on putting that right with Citystars Heliopolis Cairo, a mixed-use project that will occupy an entire city block in the heart of Cairo.

About 13 million to 16 million Egyptians live in the greater Cairo area, not to mention wealthy Arabs from the Persian Gulf who vacation and keep second homes in the area. They are served — or rather, underserved — by a mere 5,000 to 6,000 retail stores that could be considered on a par with Western retail standards.

“It suggests that [Egypt’s retail market] is substantially underdeveloped,” said London-based Robert Bloomer, an associate at Healey & Baker, the retail consulting group and international leasing agent for the project. Healey & Baker is a division of Cushman & Wakefield.

Development space is scarce in Cairo. Downtown shopping centers generally have no anchor stores and are dominated by independent retailers. Traditionally, Cairo’s malls are built as part of hotel complexes, with small extensions providing up to 100,000 square feet of retail space on about five levels, said Bloomer.

Golden Pyramids, which develops office and residential properties throughout Egypt and is controlled by the Sharbatly and Shobokshi Saudi Arabian families, has a more elaborate plan than simply to perch a few independent retailers above a hotel. Set between two affluent neighborhoods, Heliopolis and Nasr City, Citystars will be a multiuse project featuring retail and entertainment, 229,000 square feet of offices, three hotels with 1,500 rooms, an international conference center and a residential component with about 267 upscale apartments.

From souks to chic
Stars Centre is the five-level retail and entertainment portion of the development and runs the gamut of retail offerings in Egypt, from those likely to be found in traditional souks to high-end apparel retailers. The project also includes 214,000 square feet of exhibition hall space.

All told, it will be a 1.8 million-square-foot shopping and entertainment center, making it among the largest in the world. It will feature about 440 shops, plus a hypermarket and department store.

Golden Pyramids has not picked anchors yet, but Bloomer said the leasing agent is in discussions with home furnishings retailer BHV and hypermarket Monoprix as a combined hypermarket anchor tenant; both are divisions of French department store operator Galeries Lafayette, which is also being considered as an anchor.

Each level will have its own anchor and merchandise mix, starting at the below-ground level, which will be occupied mainly by the hypermarket. The main entrance, which will be directly accessible from the street, is where a substantial portion of the retail offerings will be, consisting of a department store and some midprice international apparel stores. Exclusive name brands will be one story up.

An important distinction between Stars Centre and existing retail complexes is that it will offer retailers shop units measuring up to 5,380 square feet, much larger than the typical Egyptian shop space, which measures about 500 square feet, explained Bloomer.

A food court and traditional Egyptian souk tenants will be included on the fourth level, with jewelry and housewares vendors selling their items from kiosks arranged around a narrow common space.

Two floors of entertainment space start at the food court and souks level and will include a cinema, bowling alley, indoor amusement park and family restaurants. Plans also call for a supervised play area where parents can leave their children.

“This is a flagship project,” said Bloomer, adding that while Golden Pyramids’ owners do not have other retail projects in the pipeline, they are establishing a pattern for the rest of Egypt. Other companies are looking to develop large projects in the style of American and European shopping and entertainment centers; several have been built or are under construction on the outskirts of Cairo.

One such development is Dreamland, a retail, entertainment and resort complex west of Cairo that opened last year. Owned and developed by Cairo-based industrialist and engineer Ahmed Bahgat Fatouh, Dreamland features some 2.3 million square feet of retail space and a 3.2 million-square-foot theme park. Dreamland, however, does not feature major international clothiers, but large, independent Egyptian vendors.

Stars Centre will provide an entry for international retailers wishing to enter this “huge market,” said Bloomer, attracting them with its large store spaces.

The timing is good, too: The Egyptian government in January lifted restrictions on the importation of ready-made apparel to conform with GATT, the international trade and tariffs agreement.

The rapid expansion of consumer credit, coupled with a young population, is substantially increasing demand for Western goods, according to Healey & Baker research. Egypt also has undertaken far-reaching economic reforms in the past 10 years, stimulating foreign investment and cutting inflation. While on vacation in London, Paris or Spain, Egyptian shoppers load up on goods peddled by international retailers. Now such brand names as Galeries Lafayette, Mango and Zara are looking to Egypt as the next growth market, said Bloomer. More important, other developers see Egypt as a growth market for projects like Citystars. “Golden Pyramids Plaza got [developers] looking seriously at Egypt.”

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