Dar Al-Arkan’s weak Q1 due to tough market conditions: chairman

Dar Al-Arkan Real Estate Development Co.’s profit in Q1 2017 profit declined because of tough market conditions and the pressures facing the Saudi real estate sector, chairman Yousef Al-Shelash told Argaam on the sidelines of an exhibition in Riyadh.

The developer reported a 79 percent plunge year-on-year (YoY) in Q1 2016 profit to SAR 12.1 million, attributed to lower revenue from property sales.

However, King Salman’s recent decree reversing pay cuts for civil servants and military personnel, in addition to the kingdom’s measures to boost the real estate sector such as the introduction of white land taxes, may boost investor sentiment and reduce market pressures, Al-Shelash said.

Saudi Arabia introduced a tax on undeveloped land in June last year, aimed at tackling land hoarding and easing the kingdom’s housing crisis.

Most of the land plots owned by Dar Al-Arkan, including the land allocated for its ongoing Shams Arriyadh Project, will be not be taxed, Al-Shelash said.

The Shams Arriyadh Project has been delayed as some master plan amendments are pending approval from the Arriyadh Development Authority (ADA). However, approval is expected over the coming two months, the chairman noted.

Last month, the developer said it had completed 49 percent of the required infrastructure for the project, according to its annual report.

Meanwhile, Dar Al-Arkan is currently in talks with the Saudi housing ministry over several real estate projects, Al-Shelash said, adding that the builder will pursue its ongoing developments even if no agreement is reached with the ministry.