Achieving a high level of Saudization, and paying taxes on behalf of expatriate workers is the least that each company should do as a matter of duty toward the government, says Yasir bin Faisal Al-Sharif, CEO and board member of Manafea Holding. In an exclusive interview with Diana Al-Jassem of Arab News, Al-Sharif says the Ministry of Labor’s Saudization plan must be given support from all quarters.
Al-Sharif calls for the need to speed up the implementation of mortgage law in order to address the housing problem as soon as possible. “Our next challenge will be to execute mortgage law, and then to realize its mid and long-term benefits,” he says.
He also indicates that land shortage is the main factor that delays the residential projects. “We don’t foresee a huge impact of mortgage on land prices due to the limited number of available lands,” he added.
Success receipt
What words would you choose to describe your success story within Manafea and what advice would you give to youth?
I could describe my success story in one sentence: "When success becomes a mission." My mission in life has always been to adopt an aggressive growth strategy. Over the past years, I realized that mission through consistency, concentration and perseverance. I believe that what we have is a blessing from God, and in this country I advice all youth to climb the ladder from the beginning.
What are the main obstacles facing the building and retail sectors in Saudi Arabia. Tell us how real estate sector developed through your working life?
The real estate sector is in continuous development. In the past there were a limited number of companies competing in the market with limited resources. In contrast, and due to the continuous growth of the Saudi economy, many international real estate contractors have also received the permission under the Saudi Arabian General Investment Authority (SAGIA) in order to cope up with this booming economy. This for sure fueled the competition among foreign and regional real estate companies, especially those that recently entered the Saudi market with mega construction projects fueled by government spending for projects such as the new economic cities across the Kingdom.
What is your opinion about the flexibility of Saudi laws and how do you evaluate the changes that have occurred in Saudi market?
There is no doubt that flexibility of the Saudi laws drive the changes that we are noticing on the real ground. The Saudi laws have been always adaptive to change; for example, the government's recent mortgage law regulates long-term financing, expansion and development. Such laws, for example, will boost residential lending and the creation of licensed private mortgage providers.
Company agenda
What role does Manafea play in the current real state market, and what currently are its most prominent projects?
Launching smart housing project is one of our main projects. In the first week of April, we'll reveal that project in Riyadh. We are working to contribute in the development of real estate market in several cities like Riyadh, Jeddah and Alkhobar. For example, we will be launching the Moevenpick hotel, which is scheduled to open in September. We are also working on a mega five star hotel project in Jeddah. In Riyadh, we are working with our subsidiary Daem to implement major residential Al-Rafeaa project, and another residential project in Jeddah called Al-Marwa. Moreover, in Alkhobar, we are working on Al-Rakah residential project.
What is Manafea's philosophy in the real estate market and do you think you are well equipped to pursue this vision?
Creating a lifestyle and exceptional quality in line with the market needs is our philosophy in real estate. We are looking to provide a home not just a house and to create a lifestyle with exceptional quality in line with market needs and demand.
How do you view the Saudi real estate map, especially when the Kingdom is moving toward solving the housing problem by launching several projects?
The Kingdom of Saudi Arabia is rapidly moving toward solving the housing problem. I believe that placing the regulation last month is the essential phase. Our next challenge will be to execute the laws, and then we can realize the benefit on mid- and long-term basis. However we don't foresee a huge impact of mortgage on land prices due to the limited number of available lands.
What are the main cities that attract the largest number of real estate development projects and why do they attract investors?
There is no doubt that cities like Makkah, Riyadh, Jeddah Alkhobar are mainly attracting real estate development as well as investors This is, in fact, due to increased population and residents.
Saudi Arabia is suffering from a small number of housing compounds and the high rents. What is your company's plan in terms of residential compounds?
As the Kingdom is one of the major countries that attract foreign expertise to work in investment projects, the demand for compounds is rising while their supply is still low. The presence of such a large number of foreigners requires a large number of compounds that can be comfortable for those expatriates. As Manafea realized the need for such residential compounds, we are planning to launch a number of residential compound projects targeted at middle and high income segments whose demand is really high.
Saudi real estate portfolio
What are the reasons that contribute to speed up the Kingdom's need for residential projects?
The continuous population growth caused by the baby boom, globalization and inflation are major factors that contribute to the increasing demand for residential projects. However, the growth of the Saudi economy and its population are fueling the demand for housing
How do you evaluate the demand and supply of raw materials and do they have an impact on your projects?
Inflation has heated up the Saudi market, especially the raw materials market, which is why I can confirm that "yes" the rising prices of raw materials have an impact on our projects, however so far it has not posed a threat in the market.
Competition among real estate companies is getting tougher especially when foreign investors are allowed to join the Saudi market and work with flexibility. Tell us your evaluation of the competition of these companies?
We believe that the Saudi market is a promising, booming one, and it is not saturated as yet. As the demand is getting higher, I see there is vast room for real estate companies to compete in this promising, booming market.
From you experience, tell us what are the reasons that led to the hike in the real estate prices. And what are the most expensive cities?
Unfortunately, land is in short supply and that is the main factor that has led to the hike in prices. The other contributory factor is real estate investment itself. To elaborate more, most individuals prefer to buy lands and not develop these lands. Saudis have been following this strategy for a long time to avoid their investments risks. However, Makkah is one of most expensive cities when it comes to real estate. It has undertaken a number of mega expansion projects surrounding the holy mosque area dimensioning a number of residential properties, thus resulting in a huge increase in prices of residential properties.
We noticed that the quality of shopping malls in Riyadh is much better than Jeddah. Can you tell us the reasons for this. And do you foresee high-end malls coming up in Jeddah in near future?
Riyadh has a bigger population and the consumer demand is also much higher. Furthermore, we expect new high-end malls to be developed in Jeddah to cater to growing number of from pilgrims visiting the region.
The Ministry of Labor's decision to force expatriates to pay SR 2,400 per year has angered the real estate development companies in particular. What are your views about such huge taxes, and how will they impact the Saudi real estate market?
The immediate result will be on the real estate development companies. Their profit margins will decrease, however and as part of our patriotism and commitment to our society, it is the least price we can give back to assist in solving unemployment in Saudi Arabia. I also, believe that in the future this fee will level off due to inflationary pressures.
Are you satisfied with Manafea's Saudization plan. And what is your role in terms of hiring women?
Manafea Holding and all subsidiaries are in the green zone when it comes to Saudization. As for training and hiring females the Saudi Company for Tourism Development in alliance with Moevenpick Hotels & Resorts is very active and working hard to offer special training at a corporate level with an initiative aiming to encourage Saudi females to enter the work force.
Al-Sharif’s ID
Name: Yasir bin Faisal Al-Sharif
Position: CEO and board member of Manafea Holding
Age: 40 years old
Degree: Master of science risk management from University of New York
Experience:
• Saad Group / Chief Risk Officer
• Arab National Bank / Head of Market Risk
• Samba Financial Group / Director of Market Risk
• National Commercial Bank / Market Risk Manager
