MAG Group mulls Saudi venture

MAG group CEO Mohammed Nimer.

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MAG Group Properties, a major Dubai-based developer, is laying the groundwork for entry into the Saudi Arabia construction market, Construction Week can reveal.

“We are looking at the chances (in Saudi Arabia) and have started doing so very seriously,” MAG group CEO Mohammed Nimer told CW.

Nimer also revealed that the developer is looking at potential firms to partner with, should it decide to make the move.

 “We are studying the partnership options,” Nimer said. “The idea of having a partner is very valid. It is safer, and lessens the risk.”

Nimer said that the group was at the stage of studying various opportunities in Saudi Arabia.

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“This goes back to our philosophy,” he said. “We are taking our time, planning and thinking before we take the step.”

The size of the construction market in Saudi Arabia is one of the reasons given by contractors and developers looking to make the move in order to offset the downturn in other parts of the GCC.

“In terms of relations, opportunities and jobs available, Saudi Arabia is one of the best,” Nimer said.

But Nimer warned the industry to be prepared for differences that may arise in terms of doing business when looking to enter into any new market.

“The strategic philosophy is that you cannot do it the same way everywhere. You have to do some alterations and modifications to suit the country,” he said.

Such a move would see MAG Group follow in the footsteps of Dubai-based Arabtec Holdings, which recently launched a joint venture in Saudi Arabia with CPC Services and the Prime International Group Services.

Arabtec CEO Riad Kamal called the move “a natural expansion of our activity in the region.”

Arabtec Saudi Arabia broke ground on its first project on April 2, a section of the Princess Noura Abdul Rahman University in Riyadh.

The US$408 million (SAR1.5 billion) contract, awarded by the Saudi Bin Laden Group, comprised of 46 buildings covering 250,000m2.

Nimer said that MAG Group was considering the move in order to spread risk across other GCC markets, but also added that opportunities were still there in the UAE.

“I believe that Dubai and Abu Dhabi have very similar markets and the opportunities are there, particularly in Abu Dhabi,” he said. “But if you want to go outside of the Emirates, a choice would be Saudi Arabia.”

Nimer also hinted that MAG Group was also considering options in Qatar. “Saudi Arabia is option A,” he said, “Then option B could be Qatar or some other country.”

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