Demand for real estate product grows 17% in Q2: Dar Al Arkan CFO

Philip Anthony, CFO of Dar Al Arkan Real Estate Development

Philip Anthony, CFO of Dar Al Arkan Real Estate Development, said that demand for real estate products increased by 17% year-on-year (YoY) in the second quarter of 2024, covering both residential and commercial transactions. This growth was driven by a significant YoY and quarter-on-quarter increase in the Saudi real estate price index.

In an interview with Argaam, Anthony added that the rise in Q2 2024 profits on an annual basis was mainly due to improved real estate sales and gross profit margins.

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He noted that the company's revenues grew by 16% YoY and 11% QoQ in Q2 2024, driven by higher sales of investment land.
 

Anthony explained that the inclusion of project management consulting revenues amounting to SAR 53 million from a recently acquired subsidiary also contributed to the topline increase in the second quarter of 2024.
 

Dar Al Arkan operates across all phases of real estate development, from investing in developed land plots and vertical development to property leasing.
 

The company holds development properties valued at nearly SAR 22 billion, assessed at production costs, contributing to sustainable future revenue. Additionally, ongoing major projects such as Shams Ar Riyadh, Shams Al-Arous, and Juman significantly contribute to short- and medium-term project development revenues.
 

When asked about Dar Global, Anthony said that it was established in 2017 to diversify asset classes by capitalizing on opportunities in the international real estate development sector.

He added that Dar Global started as an indirect subsidiary with a few projects but has now grown into a well-established listed company with a portfolio of 12 projects, with an estimated total development value of SAR 22 billion.
 

Anthony mentioned that Dar Global's financial information is confidential and cannot be shared, but he expects Dar Al Arkan's investment in Dar Global to deliver significant returns given its strong performance and potential development value.
 

On the Jeddah Tower project, which is being developed in collaboration with the Trump Organization, Anthony noted that the project is still in the detailed design stages, with construction likely to begin later in the second half of 2024.
 

Speaking on the performance of the Saudi real estate sector, he said the sector hit a rock bottom in 2018 and was significantly impacted by the COVID-19 pandemic. However, over the past three years, the sector has demonstrated strong performance, initially driven by pent-up demand during the pandemic, but sustained high demand has continued to boost the sector across all product categories.
 

Anthony pointed out that the strong long-term fundamentals of the Saudi market, such as demographic growth, widening supply deficit, and government focus and support, will contribute to strong growth in the real estate sector in the coming years.
 

He added that the prevailing sentiment in the sector is positive. Given the rising demand and increased transactions, this positive outlook is expected to remain in the medium to long term.
 

In light of this, Dar Al Arkan is very optimistic about the overall economic performance and specifically the real estate sector. As a key player in the real estate sector, the company does not anticipate any negative performance in the coming periods and is prepared to capitalize on available opportunities to maximize returns.
 

According to data available on Argaam, Dar Al Arkan’s profit increased to SAR 318.7 million by the end of the first half of 2024, a YoY rise of 21%.