Kingdom’s largest real estate developer plans to diversify revenue streams
Dar Al Arkan, Saudi Arabia’s largest real estate developer, plans to buy assets in Asia as part of its strategy to diversify its revenue streams, the chairman of the firm has said.
Youssef al Shelash told Reuters that the company owned just under 35 million square acres of land, and that in the past, it had relied heavily on revenue generated by land sales in Saudi Arabia. He added that the decision to branch out overseas was illustrative of the strength of Saudi Arabia’s economic boom, which had prompted local companies to diversify abroad.
“We are targeting some geographical diversification. We have a concentration issue. Most of our assets are in Saudi so we would like to diversify outside Saudi Arabia through a long plan over five to seven years,” Shelash said on the sidelines of an investment summit.
Outward flows of foreign direct investment from Saudi Arabia hit $3.4 billion last year, close to a record $3.9 billion recorded in 2010, according to the Arab Investment and Export Credit Guarantee Corp.
Shelash said his company was targeting assets outside the Gulf and North Africa, with a particular focus on Turkey, Malaysia or Singapore. He added that existing buildings would most likely be the targets, rather than developing new sites.
“We would like to get some stability in the company income,” he said, but added that it would likely take five to seven years to generate 40 percent of revenue from rental income, a goal which he said last year would hopefully take three years.
Shelash added the company was still finalising a more detailed strategy, which it hoped to have ready early next year.