Riyadh Daily Newspaper - Issue 9500
Launching an Emirate-Saudi Alliance that established for a New Real Estate Entity
Emaar Middle East (EME) targets the Investment Opportunities in the Region’s Markets
Dubai: Issam Al-Sheikh and Musaid Al-Zayani
Yesterday in Dubai an Emirate-Saudi Alliance has been announced for the establishment of a real estate development company that joins both Emaar and Al-Oula for Real Estate Development under the name of “Emaar Middle East” (EME) that aims at benefiting from the real estate prosperity currently existing in the region especially in the Kingdom of Saudi Arabia. Mohamed Al-Abbar the Executive President of “Emaar” Real Estate Company who currently occupies the post of General Director of the Dubai Department of Economic Development has said that “Emaar Middle East” is a joint venture between the two companies however he didn’t unveil the volume of its capital.
In his statements to the journalists he added that the new entity will mainly concentrate on the development of real estate projects in KSA. He said: “KSA is a huge market and the market’s forces necessitate that we concentrate on the Kingdom … It is our goal and priorit”. Until the closure of its shares circulation yesterday, the market value of Emaar Company has reached around 26 billion dirhams (US$ 7.1 billion). Analysts have found little chance for the shares being influenced increasingly by the alliance news whereas the circulation has closed yesterday at the price of 9.85 dirhams.
Walid Shihabi, Head of the Research and Studies Unit in the investment bank “Shuaa Capital” has said to Asharq Al-Awsat: “I don’t think that the alliance news will affect Emaar’s share especially that the biggest part of Emaar’s projects is concentrated in Dubai”. An official in Al-Oula Development had previously declared that his company intends to enter into investment projects inside Dubai in the form of investment, development or others and that it has allocated around SR 1 billion (US$ 260 million) for this purpose. The Saudi company manages a portfolio with a capital exceeding SR 3.5 billion that has been established two years ago by Abed Al-Latif Al-Qahtani and Mohamed Al-Fawzan Group, Abed Al-Kader Al-Muhaidib Sons Group and Ayedh Bin Farhan Al-Qahtani Group.
According to experts, the real estate market in the Gulf region is witnessing an increasing growth since the year 2001 whereas two years ago the sale and purchase in the real estate domain in the region have been estimated at around US$ 1.5 trillion, around 70% of which is concentrated in the Kingdom of Saudi Arabia. “Emaar Middle East” will invest in many domains and work on the development of integral complexes in a number of the Gulf Cooperation Council and Middle East countries. Al-Abbar said: “Al-Oula Development has advanced in great strides in the real estate domain and from this standpoint; we are pleased to welcome it as a special partner in the establishment of “Emaar Middle East” that will invest in many real estate development opportunities available in the region. The new company will be keen on selecting these investment opportunities which bring value to our clients, partners and shareholders.
The real estate market is currently witnessing a huge growth in the Middle East region and especially in the Kingdom of Saudi Arabia, which puts before us a real opportunity that opens new horizons for us”. Al-Abbar added: “We have previously specified the important and possible investment opportunities and we hope to use them for the development of projects that raise the lifestyle level in the Kingdom and the rest of the Gulf countries”. For his part, Suleiman Al-Muhaidib, the Chairman of the Board of Directors of Al-Oula Development said that this partnership will provide us with the necessary sources and give us the necessary momentum for the development of projects in the Kingdom of Saudi Arabia and other Gulf countries, such as the huge projects implemented by “Emaar”in Dubai and the luxurious projects we implemented in the Kingdom.
On the other hand, Mahathir Mohamed Malaysia’s Ex-Prime Minister and Mohamed Al-Abbar the Chairman of the Board of Directors of “Emaar” UAE have visited the headquarters of Saudi Al-Oula Development in Cityscape Exhibition 2004 in Dubai. Mahathir Mohamed had visited the company’s stand in the exhibition, took knowledge of the company’s projects implemented by Al-Oula and expressed his admiration of Al-Nakheel Project aiming at the development of Jeddah city in KSA. For his part, Ayedh Al-Qahtani President of Al-Oula Company has expressed his content on the visit made by Mahathir Mohamed and Mohamed Al-Abbar noting that there are close relations with the Malaysian side in these domains.