Dar Alarkan Chairman Yousef Al-Shalash said the developer is expected to post better results toward the end of 2011 and during 2012 as sales and rents improve, both of which were negatively affected over the past three years.
"We hope to diversify our sources of income in order to have some stability in our revenue sources as we expand our rent portfolio to 40 percent from 10 percent of the firm's revenue," Al-Shalash said.
Dar Alarkan also plans expand its housing unit sales to 20 percent of the portfolio from the current 10 percent, while halving its dependence on land sales to 40 percent from the current 80 percent.
"We hope to reach these levels within three years... We had already started working on that two years ago," Al-Shalash said.
Some 80 percent of its assets of about SR23 billion riyals ($6.13 billion) are land plots in the Kingdom, where analysts say properties are hard to value. Dar Alarkan also has SR6 billion ($1.6 billion) in debt.
"We are fully able to repay our coming obligations from the company's income, without resorting to debt... The debts do not exceed six billion riyals and it does not cause any concern for us as it only represents 35 percent of our total assets," he said.
On Saturday, Dar Alarkan said the Public Investment Fund (PIF) approved a SR4 billion facility to finance one of its biggest projects in Jeddah, the Qasr Khozam development which spans an area of 4 million square meters.
The total cost of the project is estimated at 12 billion riyals, Al-Shalash said, declining to give details on when construction will start.
"There are difficulties (in financing) for development companies in the Saudi market, especially after the financial crisis... This affected the growth in projects and implementation plans," Al-Shalash said.
The firm also plans to start building this month 500 new housing units in the capital Riyadh as the country faces a large housing shortage due to rapid population growth which reached 27 million people.
A report from Banque Saudi Fransi in March said Saudi Arabia needs 1.65 million new homes by 2015 but Al-Shalash believes the shortage exceeds that amount.
"The Saudi housing market is the best... There is real demand for housing units, around 4.5-5 million houses in the next ten years," Al-Shalash said.
