Lavish Malls Sprout Up To Attract Iranian Elite

Courtesy of The New York Times, a look at Iran’s numerous shopping mall developments:

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

Iran may be facing a dangerous economic abyss, with an empty 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 past when Iran was raking in record oil profits, earning more 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 also 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 state television and billboards, are now allowed, but only for Iranian products.

The new malls represent a departure from all this. Customers can stroll past 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 percent private owned. He is now selling the mall’s 250 shops one by one, reportedly at prices of around $330 a square meter, or roughly $30 a square foot. “We have 1,000 parking spaces and my only mistake has been that I haven’t built more,” Mr. Raftari said.

Malls comparable to the Palladium are mushrooming across the city. According to an industry website,, 65 malls and entertainment centers 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.

The colossal Mega Mall has just opened its doors near Tehran’s Mehrabad airport. Less than a mile to the north is the Kouroosh mall, a massive glass building that is home to shops and cinemas. The décor is determinedly Western, in line with the tastes and lifestyles of their target middle- and upper-class customers.

“It is just such a pleasant experience,” said Fatemeh Gholipour as she pushed her cart last week through the long and well-stocked aisles of the Palladium’s supermarket. “They have everything under one roof. It is just like the malls I have seen in Dubai and Turkey. I feel modern shopping here.”

For urban Iranians, many of whom have seen their income dwindle during years of sanctions, the malls are a confirmation of their growing influence.

Since the 1979 Islamic Revolution, the state has dominated public spaces, using murals, the morals police and state 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 destinations.

From that perspective, the ornate shopping malls stand out as middle-class outposts in the state-controlled economy, indicators of Iranians’ increasing desire to join the modern world, experts say.

“Nowadays, there are just so many urbanized, middle-class people in Tehran who aspire 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 now 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 state institutions are building all the malls,” said the chief executive of a design company that serves the shopping centers, who asked not to be named for fear of losing business. “They have moved from housing projects to malls. It’s just very profitable.”

Many of the institutions catering to the consumers’ every whim are the same ones charged with enforcing public adherence to puritanical Islamic strictures on dress and behavior. A business magazine, Tejarat-e Farda, reported last year that Iran’s police have their own construction arm, the Saze Paydar Gharn, that is currently building the Rose mall in West Tehran.

Under the “useful links” section, the police website provides a connection to the construction company. A bank affiliated to the so-called police cooperation foundation, the Ghavamin Bank, and the Mehregan Investment Company are the driving forces behind the Mega Mall, the magazine wrote.

Mr. Edalatian, the economist and a member of the Tehran Chamber of Commerce, pointed out that there is very little land left for massive shopping malls in a densely populated city like Tehran. “Those are often owned by state foundations,” he said.

He also noted that the state prefers the shopping malls to the chaotic bazaars, as it is easier to collect value added taxes from them, currently at 8 percent.

“Try to get taxes from four million individual shops in our country,” he said. “The more centralized, the better.”

In the Palladium, a couple dropped their child off at a playground in Bookland, and then went off to browse the shelves. Smiling attendants rushed to help customers at Electronic City, where tablets and iPhones lay on tables for all to test.

“This mall is not only changing our shopping culture, it’s also a place where people are nice to each other. Most people you see here are smiling and not stressed out as they are elsewhere in this city,” said Mobin Cheraghi, who was recently promoted to assistant to Mr. Raftari. “It shows that Iranians can have a Western lifestyle.”

This entry was posted on Tuesday, January 20th, 2015 at 3:26 am and is filed under Iran.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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