(MENAFN) Dar Al-Arkan Real Estate Development Co., Saudi Arabia's largest developer, announced it is planning to spend over USD267 million on projects next year as part of its plan to achieve a 10 percent growth in its business in 2015, Arab News reported.
The company said that these projects will help the Kingdom in dealing with the strong demand of housing in the country as a result of the rapid growth in population as well as the slow progress in government's building programs.
"We have a target to achieve 10 percent growth next year and this will mainly come from the local real estate market. I am very optimistic with the situation in the Saudi market over coming years," Dar Al- Arkan CEO said.
Despite the company's optimism regarding the Saudi market, the company also said that they expect that the housing shortage in the Kingdom will last a few more years, due to the market not having enough capability to meet increasing demand, as well as predicting that the property prices will rise by about 10 to 15 percent annually.
These expectations led Dar Al-Arkan to develop a diversification plan to insure that the developer will not be affected in case prices were risen which entails that only 50 percent of its revenue will be the result of selling land and housing units, while the remaining 50 percent would be the result of fixed income, which is divided between 40 percent in the leasing of housing and commercial units, and 10 percent from investment in equities and bank deposits, though the company hasn't yet achieved the 50 percent of fixed income yet but it plans to do so within five years.
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