Abu Dhabi’s ADQ agrees to fund up to $1bn expansion for Lulu in Egypt

ADQ, the investment owned by the Abu Dhabi government, has signed an agreement with supermarket chain Lulu International to help fund its expansion in Egypt. The investment could be up to $1bn and see Lulu build a further 30 hypermarkets and 100 convenience stores in the country. But will it actually happen?

Lulu currently has only one hypermarket in Egypt, in Cairo’s Twin Plaza Mall. The company has announced grand plans for expansion several times before, none of which took place.

In August 2019, Lulu announced plans to set up 6 hypermarkets and 4 mini markets with other developers from the private sector as part of the agreement it signed with the Ministry of Supply and Internal Trade and the Ministry of Housing, Utilities and Urban Communities of Egypt.

In October 2018,  Lulu signed an agreement with the Egyptian Internal Trade Development Authority (ITDA) to build five outlets totalling 100,000m² in and around Cairo. Initial sites included 6 October City, New Cairo, and Obour (which is 35km northeast of Cairo, and part of Greater Cairo). These new retail sites were costed at around EGP10bn ($557m).

When LuLu opened its Twin Plaza store in 2015, it intended to spend EGP3bn ($300m at the time) to establish 10 new hypermarkets in the following 2 years.

Lulu actually opened its first Egyptian store in Cairo’s Nasr City in October 2010. At the time Lulu outlined plans to spend AED1.7bn ($460m) over the following 2-3 years. The store subsequently closed in the turmoil following the Arab Spring.

Maybe this time will be different. ADQ owns Abu Dhabi Ports, Abu Dhabi Airport and stock exchange operator ADX. The company’s CEO Mohamed Hassan al-Suwaidi has said in a statement the agreement with Lulu International reflects ADQ’s wider commitment to investing in Egypt.

As part of the announcement, ADQ has said its investment will also strengthen Lulu’s logistics, distribution and e-commerce capabilities in Egypt.

The big question is whether Lulu’s expansion will finally happen.