RIYADH: Saudi real estate developer Dar Al Arkan has achieved great success over the years, but getting its global arm listed on the London Stock Exchange with a valuation of SR2.25 billion ($600 million) was certainly a milestone event, Dar Global’s CEO told Arab News in an interview.
“The listing had a lot of firsts,” Ziad El Chaar said, reflecting on Dar Global’s posting on Feb. 28. “We were the first IPO (initial price offering) this year on the London Stock Exchange and we are also the first Saudi company to be listed on the main market of the London Stock Exchange.”
“We are proud that Dar Al Arkan grew a company like Dar Global and listed it on the London Stock Exchange because Dar Global is not just another real estate company,” he went on to explain. “It is a very special kind of a real estate company for a new breed of customers called global citizens who live in more than one country, who work in more than one country.”
Since its establishment in 2017, Dar Global has offered interna- tional real estate by focusing on developing projects across the Middle East and Europe, including in countries like the UAE, Qatar, Oman, the UK and Spain.
The company also collaborates with global brands including Missoni, W Hotels, Versace, Elie Saab, Automobili Pagani and Automobili Lamborghini.
Asked why the company chose the London Stock Exchange to make its international listing, El Chaar replied: “For a company specializing in supplying real estate to global citizens, the biggest global hub is London … Also listing on the London Stock Exchange brings us a vehicle that is accepted by the whole globe to trade with, to partner with and to deal with.”
The UK capital was the obvious listing location for the business as Dar Global looks to access new capital and build its growth visibility with development and luxury brand partners.
The listing is also set to drive forward Dar Global’s ambitious growth trajectory as the company is now exposed to a much bigger market and much bigger transactions.
“The reason we wanted to float this company on an internation- ally accepted stock exchange and create this vehicle is mainly for growth because when you leave your home country in real estate, you need to have alliances, partnerships and joint ventures because you don’t have the market expertise like the local players,” explained El Chaar.
“Now that Dar Global is listed on the London Stock Exchange, everybody would be comfortable in having discussions with the company and eventually enter into deals.”
He added: “We go to developers and landlords and seek partnership with them on co-development of projects where we would bring in the expertise of sales, marketing, funding, international distribution, value engineering, and they would bring in their local expertise in devel- opment, permits, local regula- tion and we team up together to develop projects.”
The company, which has a pipeline of projects in countries where it currently operates in like Spain, UK and the UAE, is also aiming to enter new countries like Greece and Morocco.
“We need to go to the hubs that have global citizens because we don’t go to a company outside our home country to compete on first homes,” he said.
“International developers are not designed to satisfy first-homes demand because they don’t have this local expertise,” El Chaar explained. “So we go to the hubs where you have international buyers.”
While at it, he also pointed out that in many of the locations where Dar Global developed big master plans they are adding a hospitality element to enhance the value of that project.
El Chaar, however, is clear that Dar Global is in no hurry to jump into new countries as their priority is to consolidate their position in countries that they already have a presence in.
Talking about the finan- cial position of the company, the CEO said Dar Global had accumulated approximately $5 billion of gross development value in projects in all locations till the date of going public.
“However, we’ve so far sold around $700 million of these $5 billion,” he informed.
“The advantage for most of the shareholders is the fact that the recognition of this sale will happen in 2023, 2024 and 2025 because you know in real estate you sell but you cannot recognize the profits till you build,” he added. “Because construction is underway, most of our shareholders, the new shareholders, will see these profits happening in the next two to three years of the sales that have been done before.”
Furthermore, El Chaar explained, “We have a very conservative cash flow policy in which we only commit to projects that do not strain the cash flow of the company.
“We develop in areas where you can always have funding for that project, which is a combina- tion of the equity of the company, the funding of the banks and the collection from customers.”
With regard to the company’s strategy, El Chaar said: “We’ve decided from day one that we want to have a product that tackles the affluent taste. Most of our projects are co-branded projects. Also, most of our projects are presenting the limited edition of real estate in every city. Take Pagani in Dubai, for example. Those are the only 85 apartments in the world branded by Pagani.”
He went on to cite the example of W Residences. “We have exclu- sivity in that area that no one else can do those W Residences,” El Chaar informed. “People these days like to buy the limited edition because as we always see, it gives you a very good return on investment and a very good return on ego.”
So, what’s next for Dar Global? “By 2032, we want to be among the top 50 developers in the world,” El Chaar concluded. At the rate the company is going, that might not be a pipe dream.”