Arab News, Sunday, Mar 12, 2023 | Sha'ban 20, 1444
Dar Global raring to go after listing on London Stock Exchange
Saudi Arabia: 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.”
Growth plans
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.
Way forward
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.”