SR 450 m funding deal for Riyadh real estate project
SR 450 m funding deal for Riyadh real estate project
The long-term structured facility will allow Gulf Related to leverage its investments in the Kingdom, following the announcement last year of a multi-million dollar high-end residential project in Riyadh. The agreement was signed by Yasir Abu Sulayman, who heads the structured finance division of NCB, and Emile Habib, managing director of Gulf Related, in the presence of senior officials from both parties.
Karim El Solh, CEO of Gulf Capital, said: “Saudi Arabia is a high growth economy with a young and fast growing population and large residential developments are needed to meet the pent-up demand for housing. This flexible, long-term financing deal from NCB will allow us to launch a world-class residential compound in Riyadh with a total development cost that is projected to be over SR 650 million, which is timely and will help fill the acute shortage in residential housing in the Kingdom. We look forward to partnering with NCB on this exciting project.”
Al-Sharif Khalid Al-Ghalib, senior executive vice president and head of NCB’s corporate banking sector, said: “This financing aims to meet increasing demand for housing in the Kingdom, and reflects NCB’s vision to support the real estate sector.”
Habib said: “This is a remarkable endorsement of our ventures in the real estate development sector in general and in the Kingdom of Saudi Arabia in particular. We are excited to secure this financing deal from one of the strongest and largest financial institutions in the region. The innovation and flexibility of the current facility made NCB the clear partner of choice for us.”
“The deal has been put together with a solid understanding of our sector and our business model. NCB is a true reliable banking partner with strong financial commitment. We are looking forward to having a longstanding partnership with the bank,” he added.
Habib added: “The size of our new project in Saudi Arabia and the extent of our financial commitment reflect our strong belief in the residential sector in the Kingdom. We look forward to working with NCB on this exciting project and to building a long and successful mutual relationship.”
Sulayman said: “NCB is committed and focused toward supporting the Kingdom’s development and marquee firms such as Gulf Capital who are contributing to this process. Providing the required funding for this promising real estate project in Riyadh supports this approach and fulfills our mission to back activities that boost the national economy.”
Studies show that there is a huge demand for housing units in Saudi Arabia, projected at 1.3 million residential units over the next seven years, said a press release.
This is largely being driven by domestic demand with Saudi nationals making up more than two-thirds of the population.
However, demand for housing and other services from expatriate sources have increased rapidly over the last 3 years with a surge in expatriate population by more than 20 percent.
Riyadh’s expatriate community in particular, which already stands at around two-fifths of the city’s population, is forecasted to grow by 6 percent per annum and is expected to reach 2.8 million by 2015.
This in addition to historically limited expatriate residential compound units on the market, currently around 13,500, translates into no vacancies and wait-lists in excess of 1 year, which is ultimately having an upward trend on rental rates and therefore presents a very attractive opportunity for an experienced developer such as Gulf Related to capitalize on.
As such, Gulf Related had acquired two strategically located plots of land in the growing northwestern part of Riyadh on King Khaled Road (Salboukh Highway), where the project will be built.
The planned development, which will be built over one of these plots on an area of around 157,000 square meters, consists of a residential compound that includes 525 villas, townhouses, duplexes and apartment units.
It will be conveniently located about ten minutes from King Abdullah Financial District and twenty minutes from King Khaled International Airport.
The total development cost of this residential compound is projected to be over SR 650 million.
Gulf Related has successfully expanded its investment portfolio into real estate with distinguished partnerships and marquee projects.
The Salboukh residential compound development is the third signature project for Gulf Related, which is also currently developing The Galleria, an up-market signature destination project in Abu Dhabi.
Gulf Related has also just unveiled plans for a $ 1 billion high-end retail and mixed-use project on Al-Maryah island, in the heart of Abu Dhabi, featuring a 2.3 million sq. ft. super-regional shopping center and adjoining luxury hotel and residential towers.
Gulf Related is a leading regional real estate development venture primarily focused on residential and high-end mixed-use real estate destination developments in the Mena region.
The company represents a joint venture partnership between Gulf Capital, one of the largest and most active alternative investment firms in the Middle East, and Related Companies, one of the largest private real estate development and investment firms in the US.
OPEC oil ministers gather to discuss production increase
- Analysts expect the group to discuss an increase in production of about 1 million barrels a day
- The officials were arriving in Vienna ahead of the official meeting Friday
VIENNA: The oil ministers of the OPEC cartel were gathering Tuesday to discuss this week whether to increase production of crude and help limit a rise in global energy prices.
The officials were arriving in Vienna ahead of the official meeting Friday, when they will also confer with Russia, a non-OPEC country that since late 2016 has cooperated with the cartel to limit production.
Analysts expect the group to discuss an increase in production of about 1 million barrels a day, ending the output cut agreed on in 2016.
The cut has since then pushed up the price of crude oil by about 50 percent. The US benchmark in May hit its highest level in three and half years, at $72.35 a barrel.
Upon arriving, the energy minister of the United Arab Emirates, Suhail Al Mazrouei, said: “It’s going to be hopefully a good meeting. We look forward to having this gathering with OPEC and non-OPEC.”
The 14 countries in the Organization of the Petroleum Exporting Countries make more money with higher prices, but are mindful of the fact that more expensive crude can encourage a shift to renewable resources and hurt demand.
“Consumers as well as businesses will be hoping that this week’s OPEC meeting succeeds in keeping a lid on prices, and in so doing calling a halt to a period which has seen a steady rise in fuel costs,” said Michael Hewson, chief market analyst at CMC Markets UK
The rise in the cost of oil has been a key factor in driving up consumer price inflation in major economies like the US and Europe in recent months.
Already US President Donald Trump has called on OPEC to cut production, tweeting in April and again this month that “OPEC is at it again” by allowing oil prices to rise.
Within OPEC, an increase in output will not affect all countries equally. While Saudi Arabia, the cartel’s biggest producer, is seen to be open to a rise in production, other countries cannot afford to do so. Those include Iran and Venezuela, whose industries are stymied either by international sanctions or domestic turmoil. Iran is a fierce regional rival to Saudi Arabia, meaning the OPEC deal could also influence the geopolitics in the Middle East.