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SRECO board chair: Saudi market presents 'unique challenges'

Earlier this month, the Saudi real estate giant posted a $20m (SR74.9m) net profit for the first six months of 2018 – a modest 5.17% increase on the same period last year

Abdulrahman Almofadhi, chairman, SRECO board of directors.
Abdulrahman Almofadhi, chairman, SRECO board of directors.

Saudi Arabia’s real estate market continues to present “some challenges” unique to the kingdom, such as shifting consumer demands, the chairman of the Al Akaria Saudi Real Estate Company's (SRECO) board of directors has told Construction Week.

“Recently, developers have suffered from price volatility creating additional complexity in the planning phases," said Abdulrahman Almofadhi, who became board chair four years ago. “This has been compounded by changing consumer preference, with many people choosing apartments over traditional villas.

“In addition, developers have to contend with unregulated self-construction of private family homes, where systems are lacking and finishes are poor quality, which account for a sizeable chunk of the residential housing market."

READ: Saudi developer Al Akaria appoints new CEO

His comments came less than a week after the group, one of the biggest names in the Saudi Arabian real estate market, posted a $20m (SR74.9m) net profit for the first six months of 2018 – a modest 5.17% increase on the same period last year.

With this in mind, Almofadhi said the company’s scale has helped tackle some of the market challenges, adding the Saudi real estate market has also seen a “slowdown, due to the erosion of purchasing power in the kingdom and introduction of VAT.

READ: Saudi's Al Akaria unveils construction plan for 700ha Riyadh project

“SRECO has aligned its approach to large-scale community-focused urban developments with Vision 2030’s pillars of sustainability and innovation. The company has embarked on a new business strategy to deliver large-scale projects, including Saudi Arabia’s first mixed-use urban development that will create a new model for a community-focused urban development.”

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Construction Week - Issue 749
Sep 15, 2019