One of the biggest real estate challenges in Saudi Arabia is acquiring premium land opportunities. According to the chairman of Dar Al Arkan, Yousef Al Shelash, developers face similar challenges worldwide. “Land is so scarce in the key areas around the globe,” he says. “For example, getting a piece of land in Manhattan is a dream; that is why they had to build towers above the train station in the city’s hubs. It’s the same thing always for real estate developers. It’s finding those land opportunities in key areas because nobody wants the land in an unknown area. We all want the land in key areas. So the first big challenge for a real estate developer is always opportunities in procuring land.”
Yousef Al Shelash was one of five families that worked as a group to found Dar Al Arkan Real Estate Development in 1994. At its core, the company is focused on developing housing designs across the kingdom to meet the changing needs of the residents. “The opening up of the markets in terms of becoming more open to the external world, and more open of mixing between men and women, and opening up of so many of the restrictions that were before, allowed more and more people to live in apartments and to reduce the number of fences around the houses, is really adding a different flair to the cities — they look more alive,” says Al Shelash, who is also the chairman of Bank Alkhair in Bahrain and the chairman of Saudi Home Loan company. “By demolishing these walls and adding more landscape, we are seeing more apartment blocks. So the main cities of Saudi are really looking more and more alive. So this is one trend in the middle sector of the economy.”
According to Al Shelash, the needs of the middle economic classes are shaping the real estate preferences. “We’ve seen a shift from stand-alone houses to apartments. People are moving from villas into apartments. That is because real estate is becoming more expensive, and the utility bills for a villa are very different from the utility costs for an apartment,” he explains. That is quite the transformation since 15 years ago, when Saudi nationals had no interest in apartment living. “But now you see a big trend of movement into living in apartments, which has become an acceptable way of living,” notes Sheikh Yousef Al Shelash.
Yousef Al Shelash Talks Permits and Projects
In addition to land opportunities, one of the most challenging aspects of real estate is “the permit. It takes a lot of effort and time,” explains Al Shelash. The chairman of Dar Al Arkan, which has been listed on the Saudi Stock Exchange since 2007, says that the construction industry “is the heart of the country. It brings blood to the whole body. You look around the country for development, and if you would like to develop infrastructure, you cannot really do without them.” Dar Al Arkan is the biggest publicly listed developer in the kingdom and embraces a growth and diversification strategy. ”We grew into being present in eight countries, not only in Saudi Arabia,” says Yousef Al Shelash.
Historically, the company’s challenge has been maintaining business commitments and keeping projects on track. “As a result, cash flow management has been our key focus, not profit optimization,” says Al Shelash.
Its collaborative efforts with the industry-leading experts are what create the outstanding living experiences that Dar Al Arkan is known for throughout Saudi and Dubai. “Each residential, commercial, or mixed-use project is a masterpiece down to the last detail,” states the company. “Dar Al Arkan has introduced technology into each of its projects, making home automation, real estate digital portals, and 3D concrete printing a part of the norm. All with the objective to ensure the highest quality construction, living experience, and more importantly, return on investment.”
According to Forbes, Dubai’s residential and ultra-luxury markets are continuing to grow, especially with the demand from international buyers bringing high competition and record-breaking sales. These trends can be attributed to many factors, including the emirate’s efficient guidelines, robust recovery from the disruptions of the COVID-19 pandemic, and visa reform. Al Shelash says, “Real estate has always been a tool for the preservation of wealth. It’s increasing more and more as a trend because luckily — and maybe unluckily because of the situation with the pandemic and all of that — we have these exceptionally low interest rates that allow so many people to use houses as a preservation of wealth.
“Dubai is like Manhattan, but it’s very secure, and there are no taxes,” Yousef Al Shelash continues. “Dar Al Arkan is working in Dubai in providing unique products to the people who are investing and want to live in Dubai because so far, we’ve only taken plots that are of key locations, either on the water or in the center of the Downtown. So far, we’ve only presented Dubai co-branded products. We have presented the limited edition of the real estate market in Dubai.”
Why Co-Branding Is One of the Biggest Trends in Luxury Living
The real estate development company is on trend. In 2021 Dar Al Arkan launched partnerships with the likes of Versace Home, Pagani, Elie Saab, and Missoni. Fashion designers start with dresses, jackets, and shirts, then the co-branding evolves into accessories, and now it’s reaching cars, yachts, planes, and real estate. Co-branding with luxury brands is a major trend in real estate now, and co-branding with hospitality brands is a big trend in real estate.