SINGAPORE: Keppel Land, one of Asia’s leading property developers, feels the time is right to invest and develop a premium site in Saudi Arabia.
This is despite the fact that economic uncertainties and stock market volatility continue to weigh down sentiments in the property market.
The reason is that population growth and an increasingly robust middle class are fueling a boom in high-end real estate development in Saudi Arabia, where government reforms are encouraging dynamic construction activity.
With the Jeddah Municipality’s recent move to develop the Jeddah Corniche into one of the world’s striking seafront developments, Keppel Land, one of whose specialties is seafront property development, saw an opportunity to make a major foray into the Kingdom’s real estate sector.
The project is a 300-meter high waterfront development, consisting of two landmark residential towers with more than 900 luxury apartments, designed to meet the demand in the Kingdom’s niche market of luxury lifestyle.
The residential complex will feature all the amenities and technological advancement of the 21st Century.
It is being developed by Keppel Al Numu, the recently formed joint venture between Keppel Land and the Saudi Economic and Development Company (SEDCO).
The company will handle the project from start to finish — beginning from the first half of next year and complete it by 2013. The project is expected to cost around SR3 billion.
Keppel Land Group is excited about their first venture in the Kingdom, and this was reflected in Group Chief Executive Officer Kevin Wong’s assessment. “We are excited that our venture into Saudi Arabia is a landmark waterfront development in Jeddah, the Kingdom’s commercial and recreation hub, and our experience and expertise in developing large-scale integrated lifestyle developments will stand us in good stead in Jeddah.”
Ang Wee Gee, executive director & CEO, international, of Keppel Land International Ltd. — an arm of the Keppel Land Group, too echoed this sentiment. “With strong economic growth and accelerated economic reforms in the Kingdom, Jeddah has enjoyed high growth in real estate in recent years,” he said.
“Jeddah’s north corniche is a prime real estate location with its long sea frontage and cluster of new lifestyle developments. The city is also seeing a growing trend toward high-rise luxury apartments designed and developed by reputable developers. This is where Keppel Land will bring its superior quality in execution and management to bear on this new market,” Ang said.
He was also cautiously optimistic about the project being completed on time despite the global economic crisis taking its toll on every region. “I am optimistic because of the core strength of the Keppel Land Group. Also our partners in this project are strong,” he said.
“The global financial crisis will definitely impact everyone and many countries have slipped into recession or technical recession and this will slow growth and investments,” Ang said.
His confidence stemmed from the fact that he viewed the crisis as an opportunity. “I see this meltdown as an opportunity to expand. And it is within us to study, adapt and conceive new projects in prospective territories,” he said.
“We are currently talking to banks for funds, but we also have a fall-back plan of starting the project with internal funds. Also we will look to our local partners to raise capital,” he said when asked how the project would be funded in these difficult times.
Ang also praised the choice of their local partner, SEDCO, who, he said, have been effective in dealing with the zoning authorities while also helping to overcome red tape. “SEDCO have also helped us understand the local market and we are tuned in to the needs of the Saudi market right from the conceptualizing of the project,” Ang said.
“The market is not competitive as compared to Shanghai or Dubai, and that’s what makes it interesting to invest here. Also it is a top quality market,” Ang added.
Though Keppel Land is making its initial foray in the Kingdom, it is not new to the Gulf. “We enter any new market only after a cost-sensitive study. And we find that the Kingdom’s market is stable,” said Sam Moon Thong, deputy general manager (investment) international of Keppel Land International Limited.
“We already have a presence in Qatar with the development of Qatar Gas’ Al-Zubarah (2nd phase) and the Qatar solid waste management facility, so we are conversant with the market trends and local culture,” said Sam.
Explaining Keppel Land’s culture, Ang said, “We give extra value wherever we go. This year we have nine outstanding students/workers in an exchange program set up by our group. These nine, apart from learning the ropes in the different sections of the group, are also exposed to local culture and are immersed into the Asian work ethics. Through them we hope to expand our outreach.”
Keppel Land has contributed to changing cityscapes, not only in Singapore but wherever it operates, with its quality portfolio of award-winning residential and waterfront developments, lifestyle townships and investment-grade commercial developments, said Thomas C.H. Tan, senior marketing manager of Keppel Land International.
Leveraging Singapore’s growth as a global city and hub status in Asia, Keppel Land is contributing to defining and refining the city’s skyline with prime developments in the island nation’s dramatically transforming waterfronts — these include Marina Bay Financial Center, Ocean Financial Center and One Raffles Quay as well as the Keppel Bay Precinct in the Sentosa/Harborfront area. It also focuses on developments in China, Vietnam, India and now the Middle East.
“Keppel Land works on the ‘Go Green’ philosophy, and has been the recipient of the BCA green mark for best practices in designs and performances,” said Thomas, adding, it bagged the platinum award for its Ocean Financial Center development and the gold for Reflections at Keppel Bay, Marina Bay Financial Center, Marina Bay Residences and The Tresor.
Two other awards — One Raffles Quay for design and engineering safety excellence and the Marina at Keppel Bay for clean marina — also emphasize our efforts on eco-principles, said Thomas. While Keppel Land brings in the expertise and excellence from Singapore, SEDCO hopes to complement its partner in the joint venture with their local knowledge.
Founded in 1976 and based in Jeddah, SEDCO today is a major private Shariah-compliant wealth management company with a wide and diversified spectrum of financial, real estate and direct investments in Saudi Arabia and around the world.
The company is organized into three separately managed business groups, each of which is broadly diversified: The Real Estate Investment Group which manages a large and growing portfolio of real estate assets; the Financial Investment Group which works with the world’s leading financial institutions in the development of a global market for Shariah-compliant Islamic investment products; and the Direct Investment Group which manages SEDCO’s private equity investments in the MENA region.
