According to Bloomberg, Founder and Managing Director Mohamed Alabbar is in talks with Saudi Arabia’s housing ministry to create sizable mixed-use buildings there. Emaar Properties is the largest developer in Dubai.
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.
According to real estate consulting firm Knight Frank, the kingdom has revealed the intention of building 660,000 houses, 289,000 hotel rooms, 6 million square meters of office space, and 5.3 million square meters of retail space.
Despite a spike in construction activity in the kingdom, Alabbar urged Saudi Arabia to take into consideration subsidizing developers’ returns in the event that projects fall short of the predetermined standard, according to the report.
“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.”