New company to carry out 20 projects with SR7.45bn investments

Updated 26 March 2014
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New company to carry out 20 projects with SR7.45bn investments

The newly established Saudi Arabian Industrial Development Company will carry out 20 projects in the next five years involving a capital investment of SR7.45 billion, said Finance Minister Ibrahim Al-Assaf.
“This company will have a tremendous impact on the Kingdom’s industrial sector, making it more competitive in world markets,” he added.
“The government will invest about SR5.6 billion on infrastructure required by these projects, including wharfs at ports.”
Al-Assaf, who is chairman of the board of director of Public Investment Fund, thanked the Council of Ministers for its decision to license the new company with a capital of SR2 billion. PIF will contribute 50 percent of the capital while Saudi Aramco and SABIC will give 25 percent each.
He said the new company would exploit its basic products as well as the products of strategic industries in the Kingdom to use them for downstream and support industries. “It will invest in petrochemicals, plastics, iron and steel, aluminum and fertilizers as well as other basic industries,” he explained.
Al-Assaf expressed his hope that the new company would attract more industrial investment in the Kingdom. He praised PIF officials for their efforts to establish the new company and study its investment projects.
Abdul Rahman Al-Mufdhi, secretary-general of PIF, said the company would implement a number of downstream industries without competing with the private sector. “The new company’s projects will cover strategic sectors.”
He said the company would also focus on shipping, equipment required for energy, water and electricity, oil and gas industry and automobile industry.
Khalid Al-Falih, president and CEO of Saudi Aramco said: “The new company comes in line with Saudi Aramco’s strategic initiatives to establish service and energy industries that are capable to compete at international level.”
Al-Falih said the new company would help export a substantial portion of Saudi Aramco’s products and services to world markets.
“This will benefit the national economy through the establishment of energy-related downstream industries, creating more jobs for Saudis and strengthening the Kingdom’s global competitive position in the sector,” he explained.
Mohamed Al-Mady, vice president and CEO of SABIC, was also happy over the Cabinet decision to license the new investment company, saying it would play a strategic role in optimum utilization of basic industries. “The new company will also strengthen the Kingdom’s downstream industries.”


Dubai property developer Damac on hunt for land in Saudi Arabia

Hussain Sajwani
Updated 18 March 2019
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Dubai property developer Damac on hunt for land in Saudi Arabia

  • Brexit a “concern” for UK property market says Sajwani
  • Developer mulls investing “up to £500 million” on London project

LONDON: The Dubai-listed developer Damac says it is scouting for additional plots of land in Saudi Arabia, both in established cities and the Kingdom’s emerging giga-projects such as Neom.
Hussain Sajwani, chairman of Damac Properties, also said the company would look to invest up to £500 million ($660 million) on a second development in the UK, and that it is on track to deliver a record 7,000 or more units this year.
Amid a slowing property market in Dubai, Damac’s base, the developer is eying Saudi Arabia as a potential ground for expansion for its high-spec residential projects.
Damac has one development in Jeddah, and a twin-tower project in Riyadh — and Sajwani said it is looking for additional plots in the Kingdom.
“It’s a big market. It is changing, it is opening up, so we see a potential there … We are looking,” he said.
“In the Middle East, Saudi Arabia is the biggest economy … They have some very ambitious projects, like the Neom city and other large projects. We’re watching those and studying them very carefully.”
The $500 billion Neom project, which was announced in 2017, is set to be a huge economic zone with residential, commercial and tourist facilities on the Red Sea coast.
Sajwani said doing business in Saudi Arabia was “a bit more difficult or complicated” that the UAE, but said the country is opening up, citing moves to allow women to drive and reopen cinemas.
He was speaking to Arab News in Damac’s London sales office, opposite the Harrods department store in Knightsbridge. The office, kitted out in plush Versace furnishings, is selling units at Damac’s first development in the UK, the Damac Tower Nine Elms London.
The 50-storey development is in a new urban district south of the River Thames, which is also home to the US Embassy and the famous Battersea Power Station, which is being redeveloped as a residential and commercial property.
Work on Damac's tower is underway and is due to complete in late 2020 or early 2021, Sajwani said.
“We have sold more than 60 percent of the project,” he said. “It’s very mixed, we have (buyers) from the UK, from Asia, the Middle East.”
Damac’s first London project was launched in 2015, the year before the referendum on the UK exiting the EU — the result of which has had a knock-on effect on the London property market.
“Definitely Brexit has cause a lot of concern, people are not clear where the situation will go. Overall, the market has suffered because of Brexit,” Sajwani said.
“It’s going to be difficult for the coming two years at least … unless (the UK decides) to stay in the EU.”
Despite the ongoing uncertainty over Brexit, Sajwani said Damac was looking for additional plots of land in London, both in the “golden triangle” — the pricey areas of Mayfair, Belgravia and Knightsbridge, which are popular with Gulf investors — and new residential districts like Nine Elms.
Sajwani is considering an investment of “up to £500 million” on a new project in the UK capital.
“We are looking aggressively, and spending a lot of time … finding other opportunities,” he said. “Our appetite for London is there.”
Damac is also considering other international property markets for expansion, including parts of Europe and North American cities like Toronto, Boston, New York and Miami, Sajwani said.
The international drive by Damac comes, however, amid a tough property market in the developer’s home market of Dubai.
Damac in February reported that its 2018 profits fell by nearly 60 percent, with its fourth-quarter profit tumbling by 87 percent, according to Reuters calculations.
Sajwani — whose company attracted headlines for its partnership with the Trump Organization for two golf courses in Dubai — does not see any immediate recovery in the emirate’s property market, or Damac’s financial results.
“(With) the market being soft, prices being under pressure, we are part of the market — we are not going to do better than last year,” he said. “This year and next year are going to be difficult years. But it’s a great opportunity for the buyers.”
But the developer said Dubai was “very strong fundamentally,” citing factors like its advanced infrastructure, safety and security, and low taxes.
In 2018, Damac delivered over 4,100 units — a record for the company — and this year, despite the difficult market, it plans to hand over even more.
“We’re expecting north of 7,000,” Sajwani said. “This year will be another record.”