Sharjah’s Arada targets Dh2bn of sales by 2019 as it plans Dubai debut

Company backed by Prince Alwaleed’s son eyes global expansion while progressing in Sharjah

Ahmed Alkhoshaibi, chief executive of Sharjah real estate developer Arada which is building the Dh24bn Aljada mega-project and plans expansion to Dubai, Saudi Arabia, Milan and the UK in the coming years.Victor Besa / The NationalShow less

Arada, the Sharjah-based real estate developer backed by the son of Saudi Prince Alwaleed bin Talal, is targeting Dh2 billion of revenues by next April, as it progresses unit sales on two schemes in Sharjah and ramps up plans to expand in Dubai, Saudi Arabia and Europe over the coming years.

"The founders of Arada set out a 5-10-year roadmap, where the focus was to become the leader in Sharjah," said Arada chief executive Ahmed Alkhoshaibi in an interview with The National. "The next step is Dubai, with multiple projects, then we'll be going to Saudi Arabia, then London or Milan or both."

Arada is a joint venture between KBW Investments – a firm controlled by Saudi Arabia’s Prince Khaled bin Alwaleed bin Talal – and Basma Group.

It unveiled the 2.2 million square kilometre Aljada mixed-use community last year as Sharjah’s largest-ever scheme to date with a projected sales value of Dh24bn. The company has sold 90 per cent of phase one residential units and started sales for the second phase at the Cityscape Abu Dhabi event last week.

The project, which has ten phases, is due to be completed in 2025, while deals to appoint operators of a hotel and hospital are expected to conclude in the coming weeks. Arada is also building the 800-home Nasma Residences scheme in Sharjah, scheduled for completion in 2018.

UAE real estate prices have declined in the past two years due to low oil prices and muted demand, but developers have launched several tourism, housing and mixed-use projects in Sharjah in recent months as the emirate seeks to raise its profile and compete with its neighbour Dubai.

Mr Alkhoshaibi said Arada was experiencing no such downturn in “resilient” Sharjah, where the company closed Dh150m of sales last month, bringing its total sales value since last April to Dh1bn.

“My target for the next 12 months is Dh2bn of revenue – with this growth trajectory we are not seeing a downturn.”

The wider UAE market will bottom out in 2018, he added, with prices rising thereafter fuelled by Expo 2020 and other government initiatives. “We’re entering Dubai soon – we’re going to announce that we’re launching our first project in Dubai so we’re confident it’s a good time to be coming in,” he added.

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The first Dubai project will be a "signature" residential tower in the upper-midscale bracket, located in Dubai Marina or fast-growing Business Bay. Arada's shareholders own several parcels of land in Dubai, but the company is in talks to acquire other plots more appropriate for a first launch.

Arada plans to enter Saudi Arabia from around 2020, most likely Riyadh, depending on market conditions. “From a residential point of view, Saudi is suffering and we need to come in at the right time,” Mr Alkhoshaibi said. Average villa and apartment rents in the kingdom declined by 5 per cent year-on-year in the fourth quarter of 2017, and average sales prices by 4 per cent, according to consultancy JLL Mena.

Beyond that, Saudi Arabia is going through a more fundamental social and economic transformation underpinned by Vision 2030. “They are going through a transition and you need to know where to position yourself in that. Foreign investment laws are changing so we are studying what is happening,” he said.

Mr Alkhoshaibi is also group chief executive of Arada's co-owner KBW Investments, and says the private equity firm is targeting its first partnership acquisition in the next three months, after talks to acquire Middle Eastern contractor Habtoor Leighton Group broke down in 2017. "I was confident we'd close it but during the due diligence process we were not aligned," he told The National.

KBW is eyeing two other acquisitions before the end of this year, with one likely to be in the aviation services sector. “It’s a market that has a good growth trajectory overall and there are synergies with our existing portfolio companies,” he said.