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September 29
Emaar Properties is exploring opportunities to establish residential complexes in the Kingdom of Saudi Arabia, which is witnessing a construction boom. The company is in talks with the Ministry of Housing in the Kingdom to build large mixed-use projects, according to Emaar founder Mohamed Alabbar, and reported by Bloomberg. Al Abbar said in an interview in Abu Dhabi that the company may begin work on the residential project, which includes 4,000 units, when an agreement is reached.
Emaar has been involved in real estate development in Saudi Arabia for many years; In 2008, I began working on the King Abdullah Economic City project through Emaar the Economic City.
The project was recently repurposed to become a special economic zone in an attempt to make the place vibrant.
The Kingdom has announced plans to build 660,000 homes, in addition to 289,000 hotel rooms, 6 million square meters of office space, and 5.3 million square meters of retail space, according to the real estate consulting agency Knight Frank.
Despite the increasing activity in the Kingdom, Al-Abbar believes that Saudi Arabia must take into account supporting revenues for developers when they do not reach the agreed-upon levels in new projects. He gave an example of some sites and said that they are completely new Greefield projects, and it may take five to seven years for the developer to get a good return of more than 8%, for example.
So the government must subsidize the developer if he gets 4%, and then 5% will have to be paid, for example. (Bloomberg)
