Arada launches Dh8bn development for Sharjah
▶ Residential development to be built in phases, chief executive says
Sharjah property developer Arada plans to launch a new Dh8 billion residential project that will be built in phases.
The project will be the company’s third in the emirate, after the Dh24bn Aljada mixed-use development and the Dh1.3bn Nasma Residences scheme.
“We will be launching the first phase in November and the construction will begin in the first quarter of the following year,” chief executive Ahmed Alkhoshaibi told The National.
“It will be financed through a mix of debt, equity and sales.”
Construction of Arada’s existing projects is continuing, and the company recently awarded a Dh423 million contract to Best Building Contracting Company to build the second phase of Aljada project, comprising 2,000 units.
Last year, the company secured Dh1bn in total from two Sharia-compliant financiers to help fund the construction of Aljada and Nasma Residences. The deal came after a previous Dh1bn facility arranged in December 2017.
Arada is a joint venture between KBW Investments – a company controlled by Saudi Arabia’s Prince Khaled bin Alwaleed – and the Sharjah-based Basma Group.
Mr Alkhoshaibi said he was confident about the Sharjah property market and described it as a safe haven for investors.
“Sharjah does not fluctuate as much as other parts of the UAE. Property investors want to invest in markets which they feel are safer. Sharjah historically has been known for that,” he said.
The emirate recorded property transactions worth Dh6.2bn in the first half, up 4.1 per cent on the same period last year, according to data released at the beginning of August by the Sharjah Real Estate Registration
Department. The recent federal government decision to offer long-term residence visas of up to 10 years to investors, residents, retirees and those wishing to study in academic institutions around the UAE has had a significant impact on demand, said Abdul Aziz Ahmed Al Shamsi, director general of the department.
Mr Alkhoshaibi said there was a big gap between the performance of the Sharjah property sector and the rest of the country.
“Sharjah’s real estate department is putting a strong regulatory environment that allows developers like us to thrive,” he said.
Arada registered sales of Dh1.3bn from its two projects last year and has set a target of Dh1.7bn for this year. It plans to increase annual sales to Dh3bn by 2025.
“This year alone, we sold 1,400 units so far and we are expecting to achieve 2,000 units by the end of the year. We are confident of achieving sales targets for this year,” Mr Alkhoshaibi said.
Arada is also looking to expand into Saudi Arabia with new residential projects in Jeddah and Riyadh. Construction of the first project, a residential development with some entertainment units, will begin early next year.
Mr Alkhoshaibi stressed that the developer has no plans to list on any of the region’s stock markets in the near term but said “we wouldn’t take it off the table in the long term”.
An oversupply of residential units in Dubai’s property market has had a knock-on impact on property values in Sharjah.
Residential sale prices fell 9 per cent year on year in the emirate during the second quarter while rents declined by 13 per cent, according to Asteco’s latest report on the Northern Emirates.
Declines were steeper in newly developed districts than in established areas.