Sharjah developer Arada to launch five projects

Sharjah developer Arada to launch five projects

Property developer Arada is launching five residential projects and is targeting sales of up to Dh2.4 billion ($653 million) this year and Dh3bn in 2022 as it taps into an ongoing rebound in the UAE’s property market.

The company's new launches will include serviced apartments and other residential units at its Dh24bn Aljada master development in Sharjah, its chief executive Ahmed Alkhoshaibi told The National.

Arada is a joint venture between KBW Investments – a company controlled by Saudi Arabia’sPrince Khaled bin Alwaleed – and Basma Group of Sharjah.

The work on four projects will start next year, while one project named Boulevard 3 is already under construction, Mr Alkhoshaibi said, without providing details about the total cost.

It will finance new projects through a mix of debt and equity as well as proceeds from sales.

The UAE’s property market is bouncing back from the impact of the coronavirus pandemic, driven by government initiatives including the expansion of the 10-year golden visa programme and other measures. Experts say that the real estate market could experience a strong rebound in the next 18 months as the policymakers' response to counter the pandemic further encourages investors.

“Confidence overall in the UAE has been growing thanks to the government initiatives,” Mr Alkhoshaibi said. He also said that Sharjah, where the company has all its projects, has experienced steady growth in the real estate sector in the past 15 years.

Total real estate transactions in Sharjah grew 22.7 per cent annually in the third quarter to Dh5.7bn, according to data released by the Sharjah Real Estate Registration Department on Monday. The emirate recorded 16,781 transactions during the period.

“Sharjah itself has been a very resilient market … and it’s always been like a safe haven for investors,” he said.

The UAE's property market "will continue to grow in the next few years”, said Mr Alkhoshaibi, echoing the general market sentiment.

Arada recorded total sales of Dh2bn so far in 2021 and is targeting Dh2.3bn to Dh2.4bn in sales by the end of this year. In 2022, it aims to achieve Dh3bn in sales.

Currently, the company has no plans for an initial public offering but will consider it if “there is a value proposition and there is a need”, he said.

However, Arada may tap bond markets to raise more money to help it expand and start new projects in other emirates.

“We are discussing with our advisers on the right size, especially for our growth strategy and expansion plans,” Mr Alkhoshaibi said.

Arada secured Dh250m from Dubai Islamic Bank to speed up the construction of its Aljada mega-project in the emirate earlier this year.

The company also aims to expand to Dubai and Abu Dhabi in 2022 and is in discussions to buy land in the two emirates to launch projects.

“I will expect to launch two to three new projects outside of our existing three master plans (in Sharjah). My forecast for 2022 is that it will be a busy year for us,” Mr Alkhoshaibi said.

In 2021, the company sold 2,500 units to Emiratis, GCC citizens, Indians and customers from other countries.