The Dubai property developer Nakheel is eyeing partnership opportunities in Saudi Arabia for potential project development. The company's work has so far been concentrated in Dubai, but the kingdom's huge growth potential has made it an attractive market for UAE developers. According to Proleads, a research firm in Dubai, there are more than 285 civil construction projects worth in excess of Dh956 billion (US$260.2bn) under way or on the drawing board in Saudi Arabia.
"Saudi Arabia is a growing market that has made some improvement in its real estate legislative approach, so I think it will open up even more in the next two to three years," said Chris O'Donnell, the chief executive of Nakheel. "We're just starting to get to know local developers. We're not specially looking in the sense of a project there, but we're definitely looking to create long-term relationships with groups in Saudi Arabia."
Earlier this week, Nakheel signed a memorandum of understanding with The Land Holding, a Saudi company, for the development of property at Nakheel's Waterfront project in Dubai. The two firms plan to set up a joint-venture company to undertake the project. Nakheel's move into Saudi Arabia would follow another major Dubai developer, Emaar Properties. Through its Saudi unit, Emaar Economic City, Emaar is developing King Abdullah Economic City, a Dh183bn project north of Jeddah that will include a new port, industrial zone, financial district and residential villages.
Emaar has also joined with the kingdom's Al Shoala Group to build a Dh24.6bn township called Rawabi Rumah, near Riyadh. Mr O'Donnell said Nakheel was also looking to further its investments in companies overseas in a bid to grow internationally. Nakheel has already invested in the US-based MGM Mirage and owns a 15 per cent stake in Mirvac Group, an Australian property firm. "From an international growth perspective, we'll look to invest in other like-minded companies around the world to help us grow our international business," he said.
Mr O'Donnell also said this week that Nakheel had postponed plans to sell as much as Dh2.7bn in property investment trusts until global financial market conditions improved. The company had planned to list the securities, known as Reits, in Dubai and either London or Singapore, this year. The company, however, remains confident in the strength of the local market. Last Sunday, it revealed plans to build a skyscraper more than 1km high as part of its Nakheel Harbour and Tower Development.
"What's happening globally is just a normal economic cycle," said Mr O'Donnell. "There might be a slowdown, but there definitely won't be a crash, as the fundamentals of the Middle East market are just too strong." agiuffrida@thenational.ae
