Tuesday, Oct 05, 2010
Gulf News
5b-riyal housing project to be completed within 48 months
Dubai Arabtec, the UAE’s largest contractor, yesterday said its Saudi arm has received a contract to build 5,000 villas from the Saudi Binladin Group valued at 5 billion Saudi riyals (Dh4.89 billion).
“Arabtec Saudi Arabia LLC received a Letter of Intent to proceed with the construction of 5,000 villas and site preparation in a new housing project in the Eastern Province of Saudi Arabia with an agreed value of 5 billion riyals over a construction period of 48 months,” a company statement said.
Riad Kamal, CEO of Arabtec Holding, stated: “The award of this project demonstrates the strategic importance of the Saudi market for Arabtec. This is the second major project awarded to Arabtec Saudi Arabia LLC, the first being 46 buildings, part of the Princess Noura University project in Riyadh.”
Buoyant market
Saudi construction market is going to remain buoyant due to high oil prices that push up government savings.
“As the Gulf states look to shore up their economies in the wake of the global economic downturn, Saudi Arabia is well positioned to take advantage of their increasingly rigorous supervisory and regulatory frameworks,” said a recent report by Cluttons.
“Saudi Arabia is currently suffering from a well documented shortage of residential property as the country’s population continues to increase.”
High appetite
Property analyst Sudhir Kumar, Managing Director of Realtors International, said, “There is a very high appetite for more housing units in Saudi as the country needs more due to high population growth. This contract will be received well by Arabtec’s investors and the market generally.”
With this, the company’s work at hand rises to Dh24 billion, a senior official said.
“We are going to start mobilising resources for the construction soon,” Ziad Makhzoumi, Arabtec’s Chief Financial Officer, told Gulf News, in an interview after the announcement.
The company, which employs 60,000 workers, remains confident about the UAE’s construction market. “Only the residential property sector remains low; however, construction activities in the infrastructure are going well as oil prices hold steady,” he said.
Largest market
“Among the many markets where we are active, the UAE remains the largest construction market for us, where we have just under 40,000 workers employed in construction work.”
According to a report by Merrill Lynch, excluding Russia’s Okhta Centre (Dh10 billion), Dubai projects represent 44 per cent of the order pipeline, largely unchanged from 12 months ago.
“This is the result of Dubai projects representing 25 per cent of new awards since the fourth quarter of 2008, the restart of previously cancelled Dubai-based projects, and a slower completion rate of Dubai projects than elsewhere,” the report said.
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By Saifur Rahman?Business Editor
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