Small, medium developers supplying 70% housing in Kingdom

Updated 16 December 2012
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Small, medium developers supplying 70% housing in Kingdom

With the recent announcement by the Saudi Arabian Monetary Agency (SAMA) toward issuing the final draft regulations of the newly-approved mortgage law, companies such as Jeddah-based Capitas Group International (CGI) are taking a closer look at the overall real estate market by studying project development and developers taking part in real estate events such as Cityscape Riyadh, and revealing that up to 70 percent of housing supplies are being delivered by small to medium sized developers.
Arab News spoke to CGI’s CEO, Naveed Siddiqui concerning what positive impacts his company hopes to achieve by being a key speaker at this year’s Cityscape Riyadh and the overall impact of the mortgage law on his company, the Kingdom’s developers and overall home finance market.
“Just like any market CGI enters, we are located in Saudi Arabia to be part of the real estate sector and contribute by building strong business platforms. Being headquartered in Jeddah means our participation in Cityscape Riyadh represents our commitment to the Kingdom as a whole and its housing sector in particular.” Siddiqui said.
Siddiqui explained: "I don’t think it’s an issue of the larger developers not being keen, as they want to grow their business like any other, however, the major advantage of small to medium sized developers is that they have the ability to deliver units within a shorter time when compared to larger developers. This short lead time is generally because they undertake projects on land that has infrastructure, saving the time required for master planning, infrastructure design and development. They also reuse existing designs with minor changes and create homes using a “cookie cutter” model. This in turn shortens the time needed for complex municipality approvals.”
On the flipside, Siddiqui confirmed that small and medium-sized developers run into obstacles just as their larger counterparts do. He said that there are components that also hold back small to medium-sized developers such as not having an attractive profile that banks usually look for in terms of collateral, balance sheets, etc. and since banks do not have a product specifically designed for their needs and rely more on formal and intricate risk management guidelines, it difficult for them to get financing.
“We realize the market constraints and are working to address both sides of the housing equation by gearing up our developer financing program to be a solution for helping small and medium-sized developers,” he added.


Merkel seeks united front with China amid Trump trade fears

Updated 22 May 2018
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Merkel seeks united front with China amid Trump trade fears

  • Merkel seeks common ground to ward off trade war
  • Plans complicated by US policy moves

Chancellor Angela Merkel visits China on Thursday, seeking to close ranks with the world’s biggest exporting nation as US President Donald Trump shakes up explosive issues from trade to Iran’s nuclear deal.

Finding a common strategy to ward off a trade war and keep markets open will be Merkel’s priority when she meets with President Xi Jinping, as Washington brandishes the threat of imposing punitive tariffs on aluminum and steel imports.

“Both countries are in agreement that open markets and rules-based world trade are necessary. That’s the main focus of this trip,” Merkel’s spokeswoman Martina Fietz said in Berlin on Friday.

But closing ranks with Beijing against Washington risks being complicated by Saturday’s deal between China and the US to hold off tit-for-tat trade measures.

China’s economic health can only benefit Germany as the Asian giant is a big buyer of Made in Germany. But a deal between the US and China effectively leaves Berlin as the main target of Trump’s campaign against foreign imports that he claims harm US national security.

The US leader had already singled Germany out for criticism, saying it had “taken advantage” of the US by spending less than Washington on NATO.

Underlining what is at stake, French Economy Minister Bruno Le Maire warned the US-China deal may come “at the expense of Europe if Europe is not capable of showing a firm hand.”

Nevertheless, Merkel can look to her carefully nurtured relationship with China over her 12 years as chancellor.

No Western leader has visited Beijing as often as Merkel, who will be undertaking her eleventh trip to the country.

In China, she is viewed not only as the main point of contact for Europe, but, crucially, also as a reliable interlocutor — an antithesis of the mercurial Trump.

Devoting her weekly podcast to her visit, Merkel stressed that Beijing and Berlin “are both committed to the rules of the WTO” (World Trade Organization) and want to “strengthen multilateralism.”

But she also underlined that she will press home Germany’s longstanding quest for reciprocity in market access as well as the respect of intellectual property.

Ahead of her visit, Beijing fired off a rare salvo of criticism.

China’s envoy to Germany, Shi Mingde, pointed to a “protectionist trend in Germany,” as he complained about toughened rules protecting German companies from foreign takeovers.

Only 0.3 percent of foreign investors in Germany stem from China while German firms have put in €80 billion in the Asian giant over the last three decades, he told Stuttgarter Nachrichten.

“Economic exchange cannot work as a one-way street,” he warned.

Meanwhile, looming over the battle on the trade front is another equally thorny issue — the historic Iran nuclear deal, which risks falling apart after Trump pulled the US out.

Tehran has demanded that Europe keeps the deal going by continuing economic cooperation, but the US has warned European firms of sanctions if they fail to pull out of Iran.

Merkel “hopes that China can help save the atomic deal that the US has unilaterally ditched,” said Die Welt daily.

“Because only the giant emerging economy can buy enough raw materials from Iran to give the Mullah regime an incentive to at least officially continue to not build a nuclear weapon.”