The Dubai-based developer Nakheel has signed an agreement with one of Saudi Arabia’s biggest quoted property developers, Saudi Real Estate, to advise it on projects in the kingdom.
The agreement, which will run initially for one year, involves Nakheel providing technical support and advice to Saudi Real Estate, also known as Al Akaria, on matters such as master planning, urban design, construction management and leasing.
The deal is Nakheel’s first venture outside of the UAE, allowing for further diversification of its revenue streams away from a sluggish Dubai residential market following recent attempts to generate more recurring revenue through hospitality and retail expansion.
Al Akaria is a state-backed developer was founded in 1976. To date it has concentrated on projects around the kingdom’s capital, Riyadh. Almost 65 per cent of its shares are still held by the Saudi Arabia’s sovereign wealth fund, the Public Investment Fund.
Its live projects include a 7,000 hectare integrated master development known as Al Wasl planned north-west of Riyadh, and a project known as The Village containing more than 1,100 homes as well as shopping centres, mosques, schools and parks.
Nakheel chairman Ali Rashid Lootah said: “We are delighted to take our unrivalled know-how, experience and expertise to KSA and to work with another leader, Al Akaria, as it expands its development project portfolio.”
Abdulrahman Almofadhi, the chairman of Al Akaria, added: “Al Akaria is embarking on a large and rapid expansion.”
Mr Almofadhi said: “We selected Nakheel to enable us to kick-start and speed up these new projects, and have every confidence in its ability to help us deliver.”
Demand for residential property in Saudi Arabia is huge. In January, the kingdom’s newly appointed housing minister, Majed Al Hogail, said that the kingdom was facing a shortfall of 1.5 million homes, adding that this presented opportunities for private developers to invest. The government also introduced a new “white land tax” on empty plots in November to encourage landowners to build more homes.
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