Mabanee continues expansion on success of The Avenues Kuwait
Company holds AGM, outlines regional growth strategy
KUWAIT: Mabanee Company held an Ordinary General meeting yesterday at the Avenues Mall. Majority of the shareholders attended the meeting with an attendance of 68 percent. “It is my pleasure to present to you the 2016 Annual Report for Mabanee Co. The Annual report reflects the company’s financial results over the past year and highlights the company’s achievements, as well as the progress made on the company’s projects in Kuwait and the region,” Mohammed Abdulaziz Alshaya, Chairman of Mabanee, said.
He added that by maintaining the stability of its performance despite the fluctuating market conditions, the company has succeeded in strengthening its status in the local real estate market. It has also attracted a number of wellestablished GCC companies that seek to become a part of the company’s expansion through partnerships that will enhance the ability of The Avenues to expand in the region and create similar success stories.
The investors’ confidence in Mabanee is based on the company’s financial results. The company is considered the largest real estate company in Kuwait in terms of market value, representing 32 percent of the Kuwaiti real estate sector’s capital at KD2.4 billion ($7.8 billion). The investment in construction and expansion of The Avenues and its different phases served to increase Mabanee’s assets. Asset investment fair value stands at KD1.1 billion as of December 31, 2016.
In terms of projects being executed by Mabanee and its subsidiaries abroad, they stand at 140 million Bahrain dinars ($ 370 million) for the first and second phases of The Avenues Bahrain, as well as 14 billion Saudi Riyals ($ 3.7 billion) for all phases of The Avenues Riyadh, and 6 billion Saudi riyals ($ 1.6 billion) for The Avenues Khobar.
“Our confidence in the progress of this expansion stems from the success of The Avenues Kuwait, which has become one of the leading malls worldwide. Furthermore, the GCC retail industry’s annual growth is expected to be at 7 percent at 6-7 million square meters up to 2018. The local market growth is expected to reach 6.7 percent. To further support this, and due to weather conditions and consumption habits, malls in the region have extended beyond being shopping centers to becoming social destinations. As such, The Avenues was designed to be a place that caters to the whole family.
Financial indicators
In 2016, Mabanee achieved a net profit of KD48.7million (around $160 million) and EPS of 54.84 fils, compared to KD48.5 million in 2015 and EPS of 54.67 fils.
Shareholders’ equity was at KD344 million as at December 31, 2016, representing an increase of 13.4 percent over December 2015. Total assets reached KD732 million, reflecting 18.6 percent growth over December 2015.
Recommendations of the Board of Directors
The Board of Directors met on February 15, 2016, and based on these results has made the following recommendations to the Ordinary General Assembly and Extraordinary General Assembly:
• The distribution of 10 percent cash dividends, at 10 fils per share for all shareholders registered in the company’s records on the day of the General Assembly Meeting.
• The distribution of 5 percent bonus shares, 5 shares for every 100 shares, for all shareholders registered in the company’s records on the business day preceding the day of share price adjustment .
• The approval of Board Members’ compensation at KD 200,000 for the financial year ended December 31, 2016.
• The allocation of 10 percent of the net profit of the financial year ended December 31, 2016 for the legal reserves account.
• The allocation of 10 percent of the net profit of the financial year ended December 31, 2016 for the general reserves account (optional).
The Avenues Kuwait - Phase IV The region’s largest mall, and among the biggest in the world
Construction of Phase IV of The Avenues is proceeding successfully as per the plan. The last phase of the project will complete The Avenues, making it the largest mall in Kuwait, and one of the biggest in the region and the world. It houses a leasable area of 370,000 sqm. stretching over 1.5 km, with close to 1200 stores, restaurants, cafes and entertainment outlets.
The expansion comes at a time when Kuwait’s retail sector is forecast to continue to grow. This is linked to the high consumption levels compared to the rest of the world, as well as the population increase, especially numbers of youth, the stable incomes provided by the government, and the continuing local infrastructure projects. “We have begun leasing to several brands, where the new expansion will include 400 stores across new districts: Electra, The Forum, Grand Plaza, The Gardens, The Arcades, as well as the extensions of Prestige, The Grand Avenue and The Souk,” he said.
Given the size of The Avenues and the increasing number of visitors, and with the opening of two hotels - The five-star Waldorf Astoria-Hotel with 240 rooms, and the four-star Hilton Garden Inn Hotel with 430 rooms - we have added 5000 new parking spaces and created new entrances to ease traffic flow.
The Avenues - Bahrain The first commercial and entertainment mall at a strategic location on the sea front
The Avenues Bahrain is the first commercial and entertainment mall of its kind in the Kingdom of Bahrain, with a unique seafront location extending 1.5 km. It is strategically located in the heart of Manama, adjacent to the King Faisal Road. The development brings a new concept to the Kingdom, with a design inspired by The Avenues Kuwait and giving visitors an outdoor feeling while remaining indoors, protected from the heat by a ceiling that allows sunlight in.
More than 80 percent of the construction work is now complete. Most of the stores have been leased to different local and international brands, including brands that are being introduced to the Bahraini retail market for the first time, including Urban Decay, The Cheesecake Factory, Bateel, and others. The stores will be welcoming their visitors with the opening of the mall, scheduled for October 2017.
The project’s leasing space is around 40,000 sqm and includes 130 stores of which 50 percent are allocated for restaurants and cafes which will overlook Bahrain Bay. It also includes a large family entertainment area such as a special play hall, 12 cinemas, public parks, walkways and parking spaces. Official approval has been obtained for the construction of Phase II of the project. This will add another 30,000 sqm in leasing space, as well as new districts and a five-star hotel of 200 rooms. This will make The Avenues an attractive destination for citizens, as well as for tourists from the GCC and other countries who come for shopping, leisure and a good stay.
The Avenues - Riyadh The development that will change the face of the city
One of our large-scale projects is The Avenues Riyadh, which will be the number one destination for visitors and shoppers from across the Kingdom, GCC and the world. It is considered a development of unique aesthetic design and architecture, with a prime location overlooking the intersection between King Salman Road and Kind Fahad Road. The Avenues Riyadh, expected to be inaugurated in 2021, will be a comprehensive destination with 1300 stores, as well as five towers offering office space, apartments, halls for exhibitions, conferences and celebrations, as well as hotels ranging from three to five stars with 2200 rooms.
The immense size of the project will reflect on Saudi Arabia’s national economy, directly and indirectly supporting a number of sectors. This will boost retail, services, tourism, hospitality, transportation, construction material, industrial activities and logistical services. It will also impact human resources, as it will create thousands of job opportunities, In line with the Kingdom’s 2030 vision.
The Avenues - Khobar
We are currently in the approval stage of the final designs of the mall, which we intend to inaugurate in Q4 2022. The Avenues Khobar has been modeled around The Avenues Kuwait in terms of design and components in a manner that suits the requirements of residents of the Eastern Province. The project is located at the northwestern corner of the intersection of Kind Saud Road with Prince Sultan Road. It extends over an area of 209,000 sqm and includes a leasable area of 180,000 sqm. This includes commercial and entertainment areas, residential apartments, hotels, offices and medical facilities.
Thanks and appreciation
To conclude, and on behalf of the Members of the Board of Directors and all Mabanee employees, I would like to express my deepest appreciation to H.H. the Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah and H.H. the Crown Prince Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah. We pray that Almighty Allah continue to guide our leaders on the path of advancement of our homeland, Kuwait. On behalf of the Board Member I would also like to thank all employees for their efforts, and our shareholders for placing their trust in us, which has motivated us to exert all efforts to achieve the goals, aspirations and strategies of the company.