Arabian Construction wins Dh147 million Emaar Square project in Jeddah

The Abu Dhabi-based Arabian Construction Company has won a 150 million riyal (Dh146.9m) contract to develop the commercial district Emaar Square in Jeddah.

Emaar Middle East, a subsidiary of Dubai's Emaar Properties, awarded the contract for the development in its Jeddah Gate community project. Arabian Construction Company (ACC) also said it had bagged two new Emaar contracts in the Downtown Dubai area.

ACC will construct the three buildings in Jeddah with a total built up area of 45,000 square metres. Work began this month, and the first offices will be handed over to customers in 2016, ACC said.

Emaar Square is located in the retail and lifestyle hub of the Crescent Plaza, and is close to finance institutions such as the Jeddah Chamber of Commerce and Industry. It is also near the Haramain high speed railway, which will link the city to Mecca and Medina and is due to start operating next year.

Strong demand for commercial real estate is expected to keep vacancy rates low in Jeddah, according to the property broker JLL. In the first quarter vacancy rates were about 10 per cent, up from 9 per cent year-on-year, leading to an increase in rental prices by about 7 per cent to 901 riyals per sq metre.

Supply is also rising, with another 109,000 sq metres expected to come on line by year’s end. The total office space in Jeddah rose to 723,000 sq metres in the first quarter, up from 713,000 sq metres at the end of last year, according to JLL.

The Jeddah commercial property market “has been active and remains promising”, said Maher Merehbi, ACC’s chief executive.

ACC has previously worked with Emaar in the UAE and Egypt.

Its portfolio in Saudi Arabia currently includes the third phase of the Jabal Omar development in Mecca, a soft drinks and juices factory in Jeddah and Mig Tower in Riyadh.

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Contributed by Thomas Vanhee and Hend Rashwan, Aurifer