Iran: Lavish Malls Sprouting Up To Attract Iranian Elite

TEHRAN, Iran — The low rumble of powerful engines reverberated against the high-rises of Zaferanieh, an upmarket neighborhood, as Porsches and Mercedes lined up to enter the multistory parking lot of a fancy new shopping mall, the Palladium, the new addition to Tehran’s shopping scene.

Iran may be facing a dangerous economic abyss, with an blank treasury, historically low oil prices and the continuing damage of Western economic sanctions, but one indicator is going through the roof: Developers have broken ground on a record 400 shopping malls across the country, 65 in Tehran alone.

In part, the malls are a lagging indicator, a testament to a not-so-distant completed at the same time as Iran was raking in record oil profits, earning additional than $700 billion in the last decade. Awash in money, with a relatively strong currency, Iranians developed a taste for luxury, setting off a boom in construction projects to host new shopping experiences.
But the mall-building boom as well reflects other factors, as construction and investment companies affiliated with the Revolutionary Guards Corps and the police have led the way.

“Under sanctions, with nowhere else to invest, building shopping malls is the only lucrative business in Iran,” said Jamshid Edalatian, an economist. “The Guards, the police and other institutions are the ones who have money, so it is logical for them to invest in what makes a profit.”
Together with banks, wealthy individuals and powerful foundations, tax-exempt organizations that are supposed to care for the poor, Iran’s security forces are building malls with Western-sounding names such as Rose, Mega Mall and Atlas Plaza. Their bright neon letters stand in sharp contrast to the revolutionary slogans painted on murals in surrounding neighborhoods, labeling consumerism a Western illness and taboo under Iran’s rigid ideology.

Not so long ago, shopping in revolutionary Iran was a dull experience, with hole-in-the-wall stores offering the same clothes, electronics and furniture. Shopping was considered a necessary evil meant to support a life of religious piety. Commercials, once banned on national television and billboards, are presently allowed, but only for Iranian products.

The new malls represent a departure from all this. Customers can stroll completed Nike and Massimo Dutti stores, order freshly baked baguettes in the ground level supermarket or work out at the penthouse gym overlooking the city and its majestic Alborz mountain range.
“We cater to what people desire to do: spending money, buying stuff and enjoying themselves as they shop” said the owner of the Palladium, Hassan Raftari, who described himself as a shopaholic. The scion of a family famous for its kebab restaurants, Mr. Raftari led a business expansion into the construction of luxury apartment buildings. During his trips abroad, he said, he would always wonder why shopping in Iran was so boring.

“So I decided to build my own shopping center,” he said, stressing that his mall is 100 % private owned. He is presently selling the mall’s 250 shops one by one, reportedly at prices of around $330 a square meter. “We have 1,000 parking spaces and my only mistake has been that I haven’t built additional,” said Mr. Raftari.

Malls comparable to the Palladium are mushrooming across the city. According to an industry website, Iranmall.ir, 65 malls and entertainment center are currently being developed in the capital, and not just for the rich. Around Tehran’s southern bus terminal, one of the poorer areas of the city, three malls are under construction.

For urban Iranians, a lot of of whom have seen their gain dwindle during years of sanctions, the malls are a confirmation of their growing influence.
Since the 1979 Islamic Revolution, the national has dominated public spaces, using murals, the morals police and national media to emphasize what officials say are unchangeable revolutionary values. In private, though, Iranians have moved on, embracing satellite TV and the Internet, widening their world views and comparing their lives to those of people in Turkey, Malaysia, Europe and other popular holiday destinations.
From that perspective, the ornate shopping malls stand out as middle-class outposts in the national-controlled economy, indications of Iranian’s increasing desire to join the modern world, experts say.

“Nowadays, there are just so a lot of urbanized, middle-class people in Tehran who aim to Western lifestyles,” said Kazem Alireza, a history researcher working for the Parliament. “Their needs are met by developers who offer them consumerism, just like the Western patterns of urbanization and changing lifestyles. Shopping malls make people happy, at least for presently they are satisfied with them.”

The boom in shopping malls is just simple economics, insiders say. “Basically a group of 10 to 20 very wealthy individuals and national institutions are building all the malls,” said one chief executive of a design company that serves the shopping centers, who asked not to be named because of a fear of losing business. “They have moved from housing projects to malls. It’s just very profitable.”