Sharjah property developer Arada is launching a Dh6.3 billion ($1.71bn) office park in Sharjah and also plans to launch five new residential projects in the UAE as part of efforts to boost its property portfolio.
The new office park, with 4.3 million square feet of leasable space, will be part of the company’s Dh24bn Aljada master development and will be built in four phases, its chief executive Ahmed Alkhoshaibi told The National.
The construction of the first phase of the Arada Central Business District will begin in the first quarter of next year and is expected to be finished in two years. The overall project is scheduled for completion in 2028.
“There is no office park in Sharjah — we have these free zones, which are doing well but there is no independent, on-land corporate business park in Sharjah,” Mr Alkhoshaibi said.
“There are many companies within Sharjah and outside of it that want to relocate to a Grade A office that has many amenities.”
The company is currently in discussions with authorities to get a “potential free zone” status for the new office project, he said.
Arada will be attempting to coax companies based in the UAE — particularly Sharjah — to relocate to the new business district, including banks, start-ups and other technology companies.
It also aims to attract tech companies from outside the country and is working with the UAE government as part of the “NextGenFDI” initiative.
“There will be a section for tech companies [at the Central Business District], which we will be announcing soon,” he said.
As part of the NextGenFDI initiative, the UAE aims to attract 300 digital companies within six months to a year, Dr Thani Al Zeyoudi, Minister of State for Foreign Trade, said in July.
The country is offering incentives including access to finance and easier visa procedures to help tech companies move their operations to the UAE as part of the programme.
Demand for commercial space continues to rise in the UAE as employees return to the office and the country’s economy recovers from the coronavirus pandemic.
Office rental rates in Sharjah rose 5 per cent year-on-year in the second quarter, while in Dubai, rents jumped 13 per cent during the same period, a recent report from Asteco showed.
“There is an advantage of having an office in Sharjah because [it] is cost competitive … and the cost of living is less,” Mr Alkhoshaibi said.
Sharjah “has a huge catchment area, including the Northern Emirates”, for companies to relocate and set up operations.
The new project will be financed through a mix of debt, equity and other revenue.
It is being built while keeping in mind the requirements of the post-pandemic world, including green rooftops as well as enough space for workers to meet during or after work, said Mr Alkhoshaibi.
Arada, a joint venture between KBW Investments — a company controlled by Saudi Arabia’s Prince Khaled bin Alwaleed — and Basma Group of Sharjah, is also planning to start five new residential projects with retail spaces in Dubai and Sharjah on the back of the UAE’s booming property market.
Two projects will be launched this year and three in 2023, Mr Alkhoshaibi said, without providing details on the total cost of the projects.
The company purchased a plot of land on Dubai’s The Palm Jumeirah for Dh240 million and is currently in negotiations to buy a few more plots in Dubai and Sharjah for the projects.
The UAE property market “is resilient and will continue to grow” despite growing recession concerns and higher interest rates globally, he said.
The company recorded Dh1.49bn in property sales in the first half of the year and is “on track” to hit Dh3bn by the end of 2022. Emiratis and investors from other GCC countries as well as India and Pakistan account for the most number of buyers, he said.
Arada also aims to expand to Saudi Arabia, the Arab world’s largest economy, and is “in discussions with authorities” to start a project in the kingdom.
“We are registered there and we have an office but we need to find the right opportunity that we can add value to the residential market in Saudi,” Mr Alkhoshaibi said.
The developer aims to start a project in the kingdom in 2024.
It will consider raising more money through sukuks or Islamic bonds if there is a need, “based on our growth”, he said.
Earlier this year, Arada raised $350m by issuing a five-year sukuk and listed it on the London Stock Exchange. The developer also secured Dh250m in funding from Dubai Islamic Bank to speed up the construction of its Aljada mega project in Sharjah last year.
Mr Alkhoshaibi said there “is potential” of the company launching an initial public offering, “but we are not rushing through [the process]".
“It will come when we see there is a value proposition to the company, but at the right time.”
