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Emaar Seeks More Land for Mega City

DUBAI, 22 April 2006 -- Dubai-based Emaar Properties, the world's largest real estate company in terms of market capitalization, says it will stick to its deadline to build SR100 billion King Abdullah Economic City (KAEC) in Rabigh, north of Jeddah.

Mohamed Ali Alabbar, chairman of Emaar, told a group of journalists from Saudi Arabia that the company was in the final stages of negotiations to procure 50 million square meters of land in addition to the 55 million square meters it had been allotted for what has been described as the largest project of its kind in the Gulf.

The project, which will be a new age city for future generations of Saudi citizens, was officially launched by Custodian of the Two Holy Mosques King Abdullah in December.

Alabbar said: "As of now we are two months behind schedule. But we will work full steam to make up for the delay, even if I have to personally work with laborers."

At the Jeddah Economic Forum this year, Alabbar promised that within 24 to 36 months people would start living in the city.

He also announced that the company would set up an academy to train people about real estate development, design and finance.

Alabbar said this mega project would closely integrate itself into the Kingdom's ongoing drive to expand the economy, create employment opportunities for Saudis and function as a catalyst to attract foreign investment and boost global trade, commerce and industry.

The project, designed to make Saudi Arabia a magnet for overseas investors, is being developed by Emaar in conjunction with Aseer Trading, Tourism & Manufacturing Co. and the Binladin Group from Saudi Arabia.

Together, they will set up a joint venture company, with 30 percent of its equity to be floated for initial public offering (IPO). The project, which has been described as "another jewel in the crown of Saudi Arabia" by Crown Prince of Dubai and UAE Defense Minister Sheikh Mohammed Bin Rashid Al-Maktoum during the launch, is expected to create 500,000 new jobs.

Asked whether the company will launch its IPO now when the Saudi stock market is on a downtrend, Alabbar said: "I prefer going public when the market is up."

The KAEC is part of the Saudi Arabian General Investment Authority's (SAGIA's) ambitious plan to attract foreign funds, provide incentives and tax breaks to investors and remove hurdles facing them. Alabbar said SAGIA was acting as a facilitator of the project.

Describing various projects of Emaar, Alabbar said: "Whether it is a luxury villa, a waterfront apartment or a golfer's dream home, Emaar has a property for everyone. Emaar has numerous projects -- Arabian Ranches, Burj Dubai Downtown, Dubai Marina, Emirates Hills, The Greens, The Lakes, The Meadows, The Springs and The Views -- at various stages of development. It has a rapidly growing tenant base and is the No. 1 choice of those looking for a dream home." He said Emaar -- with over $40 billion worth of projects -- had joint ventures in Saudi Arabia, Egypt, Syria, Morocco, India, Pakistan and Turkey.

Alabbar admitted that rents in Dubai were high, but said that "there are currently many buildings in the final stages of construction. Once they are ready for occupancy, I am sure the rents will come down."

By Khalil Hanware

© Arab News 2006