Dubai’s largest developer Emaar Properties is in talks with Saudi Arabia’s housing ministry to build large mixed-use developments in the kingdom, Bloomberg reported citing Founder and Managing Director Mohamed Alabbar.
The developer will likely start working on a 4,000-unit housing project if “an agreement is reached with the ministry,” Bloomberg reported.
“We’re in serious discussions with the Ministry of Housing on working together,” Alabbar said.
The kingdom has announced plans to build 660,000 homes and 289,000 hotel rooms, 6 million sq. meters of office space and 5.3 million sq. meters of retail space, according to property consultancy Knight Frank.
Despite the kingdom witnessing a boom in construction activity, Alabbar called for Saudi Arabia to consider subsidising developers’ returns in case projects do not reach the agreed level, the report said.
“Some of the sites are greenfield and it might take five years to seven years for a developer to get a good return above eight percent for example,” Bloomberg reported quoting Alabbar as saying.
“Then the government should subsidise the developer if he makes four percent, then they’ll have to come up and top up and pay them, say, 5 percent.”
(Editing by Seban Scaria firstname.lastname@example.org )