SAUDI ARABIA - Real Estate & Construction
General Manager, Alargan Projects
As Alargan Projects General Manager, Eyad Al Bunyan has guided the company since inception to become a market leader within the Saudi residential housing sector with a specific focus on integrated housing solutions for middle-income families. Al Bunyan’s passion for Alargan Projects and its vision to become the symbol of the home that changes the lives of families of Saudi Arabia is reflected in the company’s mission to contribute to Saudi society by improving family lifestyles, and creating stability for the families through innovative housing solutions. With a passion for business, architecture, and community development, Al Bunyan ensures the company only undertakes projects that are both socially responsible and in line with all objectives set by the board.
We are a Saudi real estate development company established in Saudi Arabia in 2006, and we initially focused on middle income housing within integrated housing communities, which we target because it is the primary growth segment in the Saudi market.
We are developing communities, but that is not the whole story—we are developing integrated communities. This involves developing the infrastructure and superstructure and incorporating all end-user requirements and needs, such as hospitals and clinics that reflect the size of neighborhood, in addition to schools, mosques, and commercial strips. For commercial strips we need to make sure all the facilities are there, be it a laundry, grocery, bakery, or whatever other services are required to make sure that we are developing a fully integrated community.
Our first project, Manazel Qurtoba, is an integrated quality housing community with full services, like schools, mosques, and housing for different segments, starting from single bedroom apartments to five- or six-bedroom villas. We’ve developed the mosques, strip malls, and schools in the neighborhood. All of the infrastructure is in place and I consider it a successful business model. It is already sold and people are living there. We are starting the final stage of the project having begun in 2008, and receiving occupants in 2009.
We cannot talk about the impact of the mortgage law on the market because it hasn’t yet started, but we are expecting a negative impact on the market and the region because of the high down payment required by the authorities.
We depend on self-financing from the projects through early sales. In such a scenario, we sell a number of units within a stage of the project and proceed to subsequent stages accordingly. We change the pace of the project stages to ensure the cash flow is as planned.
Our main strategy is to deliver 10,000 units by the end of 2017, and have already developed 1,000 units, with 2,617 units under construction. By the end of 2017, we should deliver about 10,000 units. We want to have a sustainable business plan of delivering 2,500 units per annum.
Part of our work involves social responsibility as part of our core beliefs: we are not only business-oriented; we are pleased to contribute to society by developing suitable housing.
Actually, within our company here, more than 40% of the staff are Saudi. We have an orientation and training program for our employees, and we usually hire local graduates and train them on a yearly basis to grow up within the organization. So far, this program has seen limited success, and we are developing it further.
Currently, the primary challenge is in fact human resources and labor. The contractors we work with have seen some difficulties regarding staffing, and it will take a year or two for those to level out. The related immigration reform will impact costs by a minimum of 10%. It is always important to watch cost, quality, and time, and so we try to deliver projects on time to ensure our targeted return on investment.
It is generally hard to find qualified people, and this makes for strong competition for the right employee. We operate a retention plan, with such incentives as stock options, and we offer something like a fixed-bonus paid after five to 10 years.
SAUDI ARABIA - Industry
President, Royal Commission for Jubail & Yanbu
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