The opening of a new mall in Al Quoz has highlighted the industrial area's potential to develop into an economy shopping district.

The cost of leasing retail space at Al Khail Mall-Grand Hyper, which was opened by Sheikh Majid bin Mohammed bin Rashid al Maktoum, Chairman of the Dubai Culture and Arts Authority, is half that charged by other big malls nearby.

The mall contains a major Grand Hyper outlet, the first hypermarket in Al Quoz. The chain is owned by the Regency Group, and Chairman Shamsudeen bin Mohideen said the new branch would complement the company's two budget Grand Malls in the Al Quoz industrial area.

The mall has 45,000 sq ft of retail space and covers a total area of 160,000 sq ft. It was developed by Al Fattan Properties, and as well as having more than 40 public and private outlets the building will house local offices of the Dubai Naturalisation and Residency Department and the Ministry of Labour.

Anwar Ameen, Managing Director of the Regency Group, said: "Al Khail Mall-Grand Hyper is our 16th shopping outlet in Dubai and we are confident about the Dubai economy. Within one-and-a-half months the three malls will not be large enough to meet the shopping requirements in Al Quoz, which is gradually becoming a family residential area.

"From being an industrial and warehouse area, the area has developed into an area for bachelor accommodation. Now many family residential units, including Dubai Police quarters and army residences, are being built. More than 10,000 new residential units are being completed in the area.

"The mall is the first family hypermarket in Al Quoz and will make the area self-sufficient in many respects."

He said about 500 people had been recruited from around the world by the group to work at the mall and the project would create 1,000 indirect employment opportunities.

"Regency Group plans to invest Dh300 million in retail and related industries within the next five years, and we have not retrenched any staff due to the recession."

The group is launching a loyalty card called Grand Me Loyal, which will offer customers a range of promotional benefits.

Regency opened the first shopping mall in the densely populated bachelor area in 2007. The global economic crisis and the decline in the number of bachelors living there led to a 20 per cent decline in the footfall at the two Grand Malls in Al Quoz, but Regency says market studies show there is scope for new malls in the area.

Al Quoz is surrounded by large shopping centres including the Mall of the Emirates, the Oasis Centre and a LuLu hypermarket, but Regency Group Director Aboobaker Mohammed said Al Khail Mall-Grand Hyper had an advantage due to the low leasing rate.

"Over the past four years Al Quoz has witnessed a major changes from being a warehouse and industrial area to a residential area," he said, adding: "The mall opening was delayed by the economic slowdown and the construction of a new road through the area.

"There will be money exchanges, multi-cuisine food courts, jewellery shops and public services," he said.

Regency recently opened two other malls – the Grand Baniyas, the largest hypermarket in Shawamikh, Abu Dhabi, and another venture in Sharjah. It plans to start work on a new shopping centre in Kuwait within the next four months.

Basheer Mohammed, Head of Leasing and Maintainence at Al Fattan Properties said: "About 70 per cent of Al Khail Mall is already occupied. The leasing rate per year is Dh300 per sq ft on the ground floor, which is half the rate charged by other leading malls in the nearby area of Al Barsha."