The Business Year

Saudi Arabia is doing all it can to involve the private sector more in the real estate sector, including regulations, specifications, and concessions.

Abdullah F. Al Fassam

CEO, Kaden Investment

The market has started to reshape itself with all the changes made by the government. Everything that is taking place is the foundation for going forward on the Kingdom’s 2020 and 2030 visions. It is not just a vision, but a vision being put into practice. The land fee structure is something I have been calling for since 2006. This controls the value of land and puts a stop to the incredible price hikes that happen where people use land as a commodity. Land is not a commodity; it is where one develops solutions for society in terms of housing, agriculture, and administration. Hence, the regulation serves the Kingdom well. There has already been an impact. The tax ascribed according to the structure we recommended is perfect. If a plot of land does not have sewage networks, water networks, electric power generation, police services, fire brigade, or civil defense within its immediate vicinity, they are exempt 5%. So if a parcel has a neighboring parcel that is SAR1,000 per sqm and has all these services and the original parcel has none, it is likely exempt 85-90%, which is only fair. There are only 2,400 people affected under the first phase of the land fees, and phase one targets undeveloped parcels that are 10,000sqm or more, whereas in Phase II 10,000sqm of developed land will be included and is meant to start in the coming months.

Muaz Kadi

CEO, Al Diyar

The two stakeholders of Kaden have vast experience in real estate development that we can now capitalize on for our projects. Tatweer built the Al Nakhla compound, the largest and most luxurious gated community in the country, and Business Gate Complex, an office space innovative ecosystem. Also, Pan Kingdom is a large player in the cement and steel industry, in addition to infrastructure and project development. Another synergy can be found in logistics. Logistics are a complete solution including service, infrastructure, and rules and regulations. The last are provided by the government while service and infrastructure are typically provided by the private sector. We have announced our logistics park, the first project in Saudi Arabia that will provide the infrastructure and a complete solution for investors. Most of the warehouses in Saudi Arabia are small-scale, without any master development. We are changing this, and are starting with 1 million sqm as a pilot project. It will be an integrated solution: a gated community with security, property management, facility management, and warehousing. We started this project in 2014, before Vision 2030 was launched, and it will commence operations in 2018. After this, we envision expanding this concept to a sector park in Riyadh, Jeddah, Dammam, and other cities with ports and railway connections.

Saud Saad Al Arife

Chairman of the Board of Directors, Saud Saad Al Arife

Al Diyar is a family business founded 13 years ago as as an investment company. Over time, we got more involved in the real estate sector. There was a lack of well-designed, well-built projects in the Kingdom, and Jeddah is underdeveloped, especially in terms of mixed-use projects and hospitality projects. In terms of design, there was no innovation at all. We saw a great deal of potential in the market. In 2012, we formalized a six-year strategy that focused primarily on the hospitality sector, mixed-use products, and a smaller focus on certain residential segments. Since then, we delivered three projects, with two others in the pipeline to be finished in 2020. We are focused on optimizing the business right now. We have learned valuable lessons the past two years that will help us optimize the business and take it to the next level. The other important element we are focusing on is our most important asset: people. Ideas are great, but the team of the “right“ people make these ideas possible, and maintaining, developing, and attracting top players is the most important investment any owner can do for his business. We also focus on R&D. Every year, we attend at least six forums, shows, and fairs focused on our industry, such as building materials, design, hospitality, energy, construction, interior design and the like. 2018 and 2019 will witness excellent opportunities, which we are seizing.

Jamal Jaroudi CEO

CEO, Jamal Jaroudi Group

We strive for strategic projects and major megaprojects where we can use a holistic approach, avoiding competition with lesser expertise. In 2006, we started our first industrial project with Northern Region Cement (NRC), for which production started in 2008 and is now a listed company with a market value of SAR3 billion. Our second megaproject was Solb steel in Jizan, for which we invested SAR2.8 billion and is now the second-largest steel plant after SABIC’s Hadeed. For logistics, we are developing logistic hubs, small projects of around SAR600 million, where we offer closed gates with secure fencing and warehousing. As e-commerce rapidly grows, we now rent 70% of our space out to large global and domestic e-commerce players. Although there is a surplus of office space, there is always demand for quality. During the boom even housing facilities were shifted to office space, though today there is a reverse trend. We choose to develop a gated community and high-end environment with select tenants, security services, hotels, and restaurants. The Riyadh Front will not be pure office space; in fact, only 17% of the area is built up, while 83% is for landscaping, parking, and other facilities. We choose quality over quality, which will ensure demand. We have learned from the Business Gate, and we are now able to replicate and improve the success in the Riyadh Front.

Mowaffaq Al Hashimi

Executive Chairman, Saqifat al Safa

Our focus advanced from construction services to security services. Over time the latter grew significantly, and we now consider ourselves one of the main suppliers in this domain. This development into security solutions was natural; we identified a need within the market and then worked to fill it. There was no same level of awareness about the industry, though we thrived and prospered. Investing in the right people, and choosing and partnering with the best technology companies are what enable us to provide exceptional service and drove us to the success we have reached today. We are riding the wave of current demand and anticipating what will be required in the coming years. The new strategy of the Kingdom focuses on sustainable power, and we seek to be responsive to this new demand. We want to accommodate and enlarge this new business segment as best we can. We actually anticipated this shift, which allowed us to open a new branch of operations focused on LED lighting and solar power. It is a very dynamic industry with a great deal of room for growth and one of the most immediate areas that can impact an individual or business in terms of reducing their electrical consumption and carbon footprint. We are working hard to educate the public about the right quality and types of systems and about the cost savings and energy efficiency of technologies that have a higher front-end cost.



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