Saudi Arabian property developer Dar Al Arkan is planning to expand globally with new projects in Europe, China and GCC countries to boost growth, according to the vice-chairman of the company.
The company this week unveiled a Dh800 million ($217.83 million) residential project, the DaVinci Tower in Dubai, after the launch of its first project with 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 coronavirus pandemic-induced slowdown.
“We are embracing the 2030 vision of Saudi Arabia to spread successful brands outside Saudi where we will be able to demonstrate what a Saudi brand can deliver … and will be a reflection of what we have in Saudi Arabia,” Ziad El Chaar, vice-chairman of Dar Al Arkan, told The National.
Saudi Arabia, the Arab world’s largest economy, is focused to diversify its economy away from oil as part of its Vision 2030 programme. The company is currently building several new projects in Saudi Arabia.
As part of the expansion plans, Dar Al Arkan will be launching 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 looking at other countries including the UK, Spain and China as part of its global expansion plans, Mr El Chaar said. It is also building a new project in Bosnia.
“We are evaluating many areas [for expansion] but these two areas in Europe have an attention and a focus to us.”
The company opened an office in Beijing last week and is planning to develop new projects in the world’s second-largest economy in partnership with other companies, he said.
“It’s the best time to enter the [Chinese] market now because the valuations are very attractive and the Chinese government in many cities are giving a lot of incentives for international developers to enter the market.”
China’s economy is projected to grow 8 per cent this year and 5.6 per cent next year, according to the International Monetary Fund.
Starting the project in China “depends on how quickly we can forge an alliance with a Chinese company”, Mr El Chaar said.
“We don’t have the expertise of China and we will rely on a Chinese developer to help us in finding the land and work with us on the permit, the design and development and construction. We will assist with our big expertise in sales, marketing, value engineering and financing.”
The company is bullish about the property market in Dubai as it aims to start a new development next year.
“The resilience of the city is really impeccable. Despite the very tough conditions of Covid, Expo 2020 has been open and a lot of people wanted to be here because they saw it as a place which is like a haven and to escape during the lockdowns of the whole world.”
Residential property prices in Dubai jumped 21 per cent in the first 10 months of the year to Dh1,235 per square foot in October, from Dh1,021 per square foot in January, according to a recent Knight Frank study.
With the start of the Covid, “we have seen the evolution of the super-luxury market and this is what motivated us to launch DaVinci project in partnership with Italian car manufacturer Pagani”.
The average size of the unit at the tower will be 3,000 square feet and the project is expected to complete in 2023.
The company is currently building new developments in Saudi Arabia including in Riyadh, Madinah, 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 expatriates moving to the capital with their families are pushing rents and prices higher, he said.
“We are all hoping that the government will allow non-Saudi Muslims to buy on a 99 years lease in Makkah and Madinah, which will give a very big boost to the market.”
Saudi Arabia has set an ambitious target of raising home ownership rates among Saudis in the kingdom to 70 per cent by 2030 under the Sakani programme – a joint initiative between the Ministry of Housing and the Real Estate Development Fund. About 88,000 households were beneficiaries of the programme in the first half of the year, Knight Frank said.
The company will finance new projects through a mix of debt, equity and proceeds from off-plan sales, according to Mr El Chaar.