Dar Al Arkan, Saudi Arabia plans international expansion with new projects

Saudi property developer Dar Al Arkan plans to expand globally with new projects in Europe, China and GCC countries to drive growth, according to the company’s vice president.

The company this week unveiled an 800 million dirham ($217.83 million) residential project, the DaVinci Tower in Dubai, after launching its first project of the same value in October.

The Tadawul-listed company, with assets worth 25 billion Saudi riyals ($6.8 billion), plans to start another project in Dubai next year as the emirate’s property market continues to recover from the downturn induced by the coronavirus pandemic.

“We are embracing Saudi Arabia’s 2030 vision to bring successful brands outside of Saudi Arabia where we can demonstrate what a Saudi brand can offer…and will be a reflection of what we have in Saudi Arabia Saudi Arabia”, said Ziad El Chaar, vice-president of Dar Al Arkan, said The National.

Saudi Arabia, the largest economy in the Arab world, is working to diversify its economy away from oil as part of its Vision 2030 program. The company is currently building several new projects in Saudi Arabia.

As part of the expansion plans, Dar Al Arkan will launch a new residential development in Doha in partnership with Katara Hospitality as well as a new six billion riyal mixed-use project in Muscat in a joint venture with Oman Investment Authority.

The company is considering other countries, including the UK, Spain and China, as part of its global expansion plans, El Chaar said. He is also building a new project in Bosnia.

“We assess many areas [for expansion] but these two regions in Europe have an attention and a focus on us.

The company opened an office in Beijing last week and plans to develop new projects in the world’s second-largest economy in partnership with other companies, he said.

“Now is the best time to enter the [Chinese] market now because the valuations are very attractive and the Chinese government in many cities is very incentivizing international developers to enter the market.”

China’s economy is expected to grow 8% this year and 5.6% next year, according to the International Monetary Fund.

The start of the project in China “depends on how quickly we can forge an alliance with a Chinese company,” El Chaar said.

“We don’t have the expertise in China and we rely on a Chinese developer to help us find the land and work with us on permitting, design and development and construction. We will bring our deep expertise in sales, marketing, value engineering and financing.

The company is optimistic about the real estate market in Dubai as it aims to start a new development next year.

“The resilience of the city is truly impeccable. Despite the very harsh Covid conditions, Expo 2020 was opened and many people wanted to be here because they saw it as a place that felt like a haven and to get away from it all during lockdowns around the world.

Residential property prices in Dubai jumped 21% in the first 10 months of the year to reach Dh1,235 per square foot in October, from Dh1,021 per square foot in January, according to a recent study by Knight Frank.

With the onset of Covid, “we saw the evolution of the super-luxury market and this is what motivated us to launch the DaVinci project in partnership with the Italian car manufacturer Pagani”.

The tower’s average unit size will be 3,000 square feet and the project is expected to be completed in 2023.

The company is currently constructing new developments in Saudi Arabia, including Riyadh, Medina, Jeddah, Makkah and Taif.

“The demand is very high in Riyadh because there is a growing population and there is a young population,” he said. Many expats moving to the capital with their families are driving up rents and prices, he said.

Apartment prices in Riyadh jumped 17% annually in the third quarter while villa prices rose around 10%, fueled by a growing population, according to a new report from Knight Frank.

“We all hope that the government will allow non-Saudi Muslims to buy a 99-year lease in Makkah and Madinah, which will give the market a very big boost.”

Saudi Arabia has set an ambitious target to increase Saudi home ownership in the kingdom to 70% by 2030 under the Sakani program, a joint initiative of the Ministry of Housing and the Real Estate Development Fund . About 88,000 households benefited from the program in the first half of the year, Knight Frank said.

The company will fund new projects through a combination of debt, equity and proceeds from off-plan sales, according to El Chaar.

Updated: December 16, 2021, 6:34 a.m.

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