The withdrawal of foreign investors from Iran’s economy could severely reduce the country’s chances of competing in global markets and might even push Iran’s economy out of the global economic cycle. For this reason, some experts believe that the decline in foreign investment in recent years—particularly the recent withdrawal of major investors—has raised concerns that other investors may also pull their capital out of Iran. This could paint a picture of increased isolation for Iran’s economy.

The Exit of Hyperstar from Iran Was Denied, But…

The rumors of Hyperstar’s exit from Iran—owned by Majid Al Futtaim, the second wealthiest person in the Middle East according to Forbes—stirred much debate in recent days, following the exit of Savola from Iran’s investment market. The initial spark for speculation about the company’s withdrawal was the transfer of its property to a state-owned bank (Bank Shahr). On Tuesday, January 1, 2025 (11 Dey 1403), members of Tehran City Council reviewed a bill titled “Authorization for the Sale, Transfer, and Transaction of a Property Owned by District 5 Municipality of Tehran.”

Mohammad Akhondi, a member of Tehran City Council, discussing the bill, said that the property in question was Hyperstar and part of a joint venture project. He added, “Keep in mind that we have obligated Tehran Municipality to repay its bank debts this year. The municipality’s debts are high, and it also carries accumulated losses. One reason for transferring this property to Bank Shahr is to settle debts. Although this project is a joint venture and two years remain in its timeline, if the property is not transferred to the bank during this period, it may become difficult to complete the transfer after the project’s conclusion.” (1)

Lutfollah Forouzandeh, Deputy of Finance and Urban Economics of Tehran Municipality, also stated that the banks claimed a 1,700 trillion rials debt from Tehran Municipality. “Bank Tejarat had the highest claim, but we negotiated and reduced this figure to 890 trillion rials.” He added that the municipality’s current debt to Bank Shahr is about 450 trillion rials. Regarding the Hyperstar property on Bakri Highway, located in a commercial zone, Forouzandeh said the assessed value is 110 trillion rials. He explained, “For now, the property is rented to a private-sector partner for two more years. The municipality cannot operate commercial projects, and Bank Shahr is now willing to take over the Hyperstar property, which has already generated its added value.”

The Deputy Mayor emphasized that transferring this property would expedite urban development projects and noted, “Bank Shahr will provide 50% of the payment through LC and draft cards. We have obtained a special resolution from the Central Bank to settle our debts, as the Central Bank requires banks to pay claims in cash. They agreed to allow Tehran Municipality to settle its debts with a combination of cash and non-cash payments, but this authorization has a deadline.”

Ultimately, the Tehran City Council approved the bill, giving authorization for the sale, transfer, and transaction of the property owned by Tehran District 5 Municipality. (2)

In effect, Tehran Municipality can transfer Hyperstar’s Bakri branch property for 117 trillion rials solely to settle its debts to Bank Shahr. Following this resolution by Tehran Municipality, speculation about Hyperstar’s exit from Iran intensified. However, on January 13, 2025 (23 Dey 1403), Fars News Agency published an interview with the chairman of the Union of Chain Stores, who denied the rumors about Hyperstar’s withdrawal from Iran.

Mohammad-Ali Khorasani told the news agency: “Based on the information obtained from Hyperstar chain store officials, the company’s investor has no intention of leaving Iran, and the rumors on this matter are baseless.” He explained that the main issue concerns the lease contract of the Bakri Highway branch property, which is valid for another two years. This means Hyperstar can continue its commercial activities at this location, but after the lease expires, the company will need to find a new place of operation. Additionally, the store’s officials stated that negotiations to renew the lease for the Bakri branch are currently underway, and the contract may be extended. (3)

This interview came after Tehran Municipality’s authorization for the sale and transfer of Hyperstar’s property. It appears that one of the reasons behind the rumors of Hyperstar’s exit is the municipality’s debt to Bank Shahr and its intention to settle this debt by selling the Hyperstar property without considering the company’s operational conditions at the Bakri Highway branch. To date, no official document has been released from the municipality regarding its authorization to sell the store. Hyperstar has yet to issue a statement about its withdrawal or continued operations in Iran. The controversy surrounding the company has only been reported by Fars News Agency, and no other media outlets have confirmed Hyperstar’s official exit. However, some speculate that if Hyperstar can purchase its leased property from Bank Shahr, the company will remain in Iran for at least another two years. (4)

The Hyperstar Controversy Gained Traction Due to Savola’s Exit

Before concerns about the potential closure of Hyperstar’s Bakri Highway branch became more serious, reports emerged about the withdrawal of Savola, one of the oldest investors in Iran’s food and beverage market. Some media outlets reported that Savola is in the final stages of legal procedures to transfer its operational assets in Iran to a foreign investor. Although the company has not disclosed the name of the new investor, Savola representatives stated that the main reason for its withdrawal is to focus on markets with greater growth potential. According to the contract signed by Savola, the company sold its operational assets in Iran to a foreign firm for 705 million Saudi riyals, approximately $188 million. (5)

How Did Savola Sell Its Shares?

Savola exited Iran by selling its shares in Behshahr Holding. Sources close to the matter revealed that Savola’s shares in Behshahr were transferred to a UAE-based company. It is reported that this company has ties to an Iranian investor with years of experience in importing animal feed. According to Fars News Agency, the shares were sold in bulk on January 1, 2025 (12 Dey 1403). Savola had invested in the production of edible oils, including the Ladin, Bahar, and Nastaran brands.

Although Behshahr Holding is listed on the Tehran Stock Exchange and is required to disclose transaction details under transparency regulations, no information on this sale has been published on the Codal system. According to Fars News Agency, other shareholders of Behshahr Holding are all private citizens with no ties to military institutions. (6)

Trump, Food Prices, and Disheartened Investors

Some analysts believe that if Hyperstar exits Iran, it could signal that the new U.S. presidency (Donald Trump) poses risks for Iran. The reimposition of sanctions and the potential for a freefall in Iran’s fragile economic growth serve as red alerts for investors, encouraging them to quickly convert Iranian rials into global currencies to prevent losses. This hypothesis gains strength as inflation rises and the rial’s value diminishes, putting further strain on Iranian citizens.

Should Hyperstar leave Iran, domestic investors such as Snapp Grocery—one of Hyperstar’s partners in Iran—are likely to increase their prices. Similarly, after Savola’s exit from Iran, despite claims that cooking oil prices would remain stable until the end of 2025 (1403), reports indicate a 15% price increase in solid and liquid cooking oils. As an example, the price of a one-liter bottle of frying oil rose from 550,000 rials to 630,000 rials. (7)

References:

1. “Hyperstar Property Transferred to Bank Shahr,” Tasnim News Agency, January 1, 2025 (11 Dey 1403).
2. “Transfer of Hyperstar Property in Tehran District 5 to Bank Shahr for Debt Settlement,” ISNA, January 1, 2025 (11 Dey 1403).
3. “Has Hyperstar Left Iran?” Sharq Network, January 13, 2025 (23 Dey 1403).
4. “Union President: Hyperstar Investor is Not Leaving,” Fars News Agency, January 13, 2025 (23 Dey 1403).
5. “UAE Replaces Saudi Firm,” Donya-e-Eqtesad, January 5, 2025 (15 Dey 1403).
6. “Savola Holding Transparency on Exit from Iran,” Fars News Agency, January 5, 2025 (15 Dey 1403).
7. “Cooking Oil Prices Increased by 15%,” Mehr News Agency, January 14, 2025 (24 Dey 1403).