Dar Al Arkan unveils 7.5b riyal project

Riyadh: Dar Al Arkan Real Estate Development Co, Saudi Arabia's largest developer by market value, will spend 7.5 billion riyals (Dh7.4 billion) over a period of five years on a new residential project in Jeddah.

Construction of the new integrated project, which will have more than 10,000 units and leisure and shopping facilities, as well as schools, will begin in 2010, the company said in a statement posted on the bourse website.

"The company focuses its investments on areas where there is a wide gap between supply and demand," it said.

The first phase of the so-called Shams Al Arouss property project will cost 1.5 billion riyals and will involve the construction of 2,000 housing units, the company said. It did not say when this first phase would be completed.

Dar Al Arkan will seek loans to help finance the project.

"The project will be fin-anced from mixed formulae that include revenues from the project, cash flow from the company's operations and external financing," it said.

Dar Al Arkan reported on Saturday a 14.4 per cent drop in third-quarter net profit due to what is said was a slowdown in the property market.

Saudi property developers are not as well-organised as some of their peers in the region, due mainly to mortgages being unaffordable for ordinary Saudis, as a lack of legislation means banks are reluctant to issue such financing.