Whether with a Missoni or Pagani tie-ups, DarGlobal is getting its Dubai projects do the talking. With launches in Qatar and elsewhere, 2023 will be the year for take-off at DarGlobal. Image Credit: Supplied

Dubai: Ziad El Chaar should be clocking a lot of air miles these days. The CEO of DarGlobal needs to as the international arm of the Saudi mega-developer Dar Al Arkan has multiple projects running across countries and continents.

Plus, of course, prepare for a listing on London Stock Exchange at some point before March 31. All of which means El Chaar is a constant presence in fancy airport lounges and on flights within the Gulf and beyond. Not that he is complaining a bit about the travel.

In an interview, El Chaar gives a broad outline on the medium-term plans for DarGlobal.

Has the name change to DarGlobal already happened (from Dar Al Arkan Real Estate Development, which is the name of the Dubai-based entity)?

DarGlobal is being consolidated as a holding company (for all international operations) in the UK in preparation for the listing on London Stock Exchange. DarGlobal will be the UK holding company of the group’s international property development interests and marketing offices in the UK, Spain, UAE, Oman, Qatar, Bosnia and China.

All your eye-catching in recent times - whether it's in Dubai, Qatar or Oman - have been outside of Saudi Arabia. Is that something you're doing on purpose?

We need to differentiate between the two companies. Dar Al Arkan Development, a 28-year old company, is among the biggest developers specialized in the Saudi Arabia market, and has delivered more than 15,000 residential units and 500,000 square meter of commercial space. And continues to have a very big pipeline of developments in Saudi Arabia.

The main reason you don't hear the news of the Saudi Arabian company is because the product is 100 per cent designed for Saudi Arabia, and we do not announce outside Saudi Arabia. All the announcements happened inside Saudi Arabia. And Dar Al Arkan is working with the newly established governmental companies like Roshn on the development of some of their mega masterplans.

Do you hear some of your bankers hinting that DarGlobal is overstretched with its roster of projects – the ones in the Gulf, London, Bosnia and elsewhere?

You can always say that we have taken Dar Al Arkan Saudi Arabia and stretched it to all of these areas. But that is not what happened. For the last four years, we have invested in establishing a totally new company, with new staff and a very strong and experienced management team to do the expansion out of Saudi Arabia under DarGlobal.

The full management team of DarGlobal is totally independent of the management team that sits in Saudi Arabia. We did not stretch the existing company in Saudi Arabia and this is what people see, especially the bankers, because we are in the middle of a presentation to potential investors for our announced IPO.

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DarGlobal has been created to serve a very specific market that has been growing aggressively in the last 10 years. Actually, the real estate market has benefited from the pandemic, and this market is developing demand for second homes, second primary homes, and international investment homes.

In all the places where we expand, we do not go and compete with incumbent developers or for first home sales. I can never claim to go to Spain and say we are the most experienced company to supply first homes to Spaniards.

We are working in an area in the south of Spain, which is an international hub for more than 80 nationalities to buy real estate in that area, to live, work and invest.

Some people are buying a second primary home in the south of Spain, because the pandemic allowed us to start working online and using Zoom like we are doing now. For instance, many people from Scandinavian countries, spend six months of the summer in Sweden, then six months in the winter in Marbella, because they can continue working remotely.

Stock – Dubai Missoni Tower
In Dubai and Doha, DarGlobal tapped into a rich vein of offplan demand from wealthy investors. It plans to do the same now in Oman, where it has a project in alliance with The Trump Organization. Image Credit: Supplied

It is the same in Dubai, Muscat and Doha which are international hubs. We are catering to the international buyers in International hubs.

That means a word like ‘mid-market will not enter your dictionary?

Most of the demand for second homes is coming from affluent customers. Because you need to pay for it from your own wealth or equity.

I always give the example of a Louis Vuitton store. They have a bag for Dh200,000 and a bag for Dh6,000. Similarly we are supplying a luxury product that can come in small areas, just like that bag at Dh6,000, and we also have the penthouses and big villas that are like the Dh200,000 bag.

You mentioned the degrees of separation between yourself and the parent company. Do you really need that, especially with your bankers?

The separation of the management, the accounts and the system will be completed by the time we are listed. This is because, one of the requirements of the FCA in the UK is that any listed company should be totally independent.

We have a lot of advantages with Dar Al Arkan as our parent company and there is a relationship agreement that is in the process of being approved by the FCA, which gives us a lot of advantages as DarGlobal, to grow with the support of our parent company.

You talked about the alliances and partnerships with an entity like Roshn. Can that same strategy of alliances be brought to DarGlobal as well?

DarGlobal started very aggressively on this front, even before the deal with the Roshn was struck with Dar Al Arkan in Saudi Arabia. We have a joint venture with the government of Oman on our Muscat project and a joint venture with a governmental company in Qatar called Katara Hospitality.

This is what we call a capital light model. We are going to rely on this capital light model and we assume those JVs will allow us to grow at a bigger pace.

They bring in the land and you bring in the rest of the expertise and the investment. Is that how it is?

Approximately, yes.

You brought in the likes of Pagani and other big luxury names to your residential offerings. Is that something you're going to double down on in 2023 and beyond?

These brands only work with companies that can deliver. So when you work with a brand like Pagani that sells a car for 5.5 million euros, they have done due diligence on us and they saw that we can deliver and protect their brand.

Now, introducing new brands into Dubai or any other area like London or Spain, is based on the target customer that we have. This is because the expansion with brands is always presented to the market with a limited edition of real estate. And as you know, there is big interest in anything which has limited edition, especially in real estate.

I always say, these brands give the buyers an RoI and RoE. RoI is the return on investment. At the same time, it gives you a very high ‘RoE’, which is a ‘Return on Ego’. You satisfy your ego by owning that Pagani apartment just like owning that Pagani car, which very few people can own.

Will 2023 be a year of the IPO and of completing building your new announced projects?

2023 will be a year where we will be launching many of the projects that we acquired in the last two to three years. We still have to launch our projects in Spain and Oman. Hopefully, by the end of the year we will also have our first international project handover, which is the Missoni tower on the Canal in Dubai.