Mazaya Saudi Entering the Saudi Real Estate Market
Esbaitah: Mazaya Saudi secured a new state-of-the-art office tower in Riyadh to house its corporate headquarters
Esbaitah: Each of Mazaya Saudi’s initial 3 seed projects are targeting a minimum IRR of 20% and is planning a ground-breaking ceremony of initial 3 projects by January 2009
El-Quqa: Mazaya Saudi is well positioned to enter the Saudi real estate market with full force
Mazaya Saudi has announced that the Company has secured a new state-of-the-art office tower in Riyadh to house its corporate headquarter. The tower was recently developed and has the latest in office space infrastructure technology. This tower will be the command center from which Mazaya Saudi will manage its operations in the Kingdom.
As Mazaya Holding will manage Mazaya Saudi for an initial term of three years, Eng. Khaled Esbaitah, Vice Chairman & CEO of Mazaya Holding stated that, “Mazaya Saudi is planning a ground-breaking ceremony by January 2009.” Mazaya Saudi has already secured two plots of land in Riyadh, located within Al-Ghadeer and Al-Falah districts and is in the process of evaluating several other residential development projects to undertake in the first year of operations.
Mazaya Saudi’s initial projects include residential, commercial and retail developments and are expected to be completed over a period of three years. In addition to these two projects, the Company plans to begin developing an additional large-scale residential project, which is also expected to be completed within three years, explained Esbaitah.
The first project of Mazaya Saudi is a mixed-use development on a 21,790sqm plot of land in Al-Falah district of Riyadh, with residential and commercial components. The Company expects the project to begin generating revenue in the second year of operations, when it begins selling its residential units. The commercial portion of the property will begin generating rental revenue in Year 3 when construction of the showrooms is complete and ready to be let.
The commercial component of the project is expected to yield a 10-year IRR of 21.1%, while the residential component is estimated to generate 20.4%.
The Company’s second project will be built upon 26,745sqm plot of land in Al-Ghadeer district of Riyadh, which has a has a strategic location at the intersection of King Fahad Road and the North Ring Road. The plan is to develop the plot into low-rise, Class A office buildings. Like Mazaya Saudi’s first project, this project is expected to begin generating rental income in the third year of operations. The second project is expected to yield an IRR of 21.8%.
The Company plans on commencing construction of a residential development during the first year of operations. The project will consist of villas, targeted at the middle to high income segment. The construction period is expected to be from first year of operations to the third year of operations, and Mazaya Saudi plans to sell 100% of the residential units. The project is expected to generate an IRR of 21.9%.
“The initial three projects of Mazaya Saudi will lend the Company a strong foundation to build upon for its future operations, and will also enable the Company to immediately deploy its resources, while mitigating operational risk,” explained Mr. Omar El-Quqa. The current strategic partners will also do their part in building a solid base for Mazaya Saudi, which include Mazaya Holding, Global Investment House, Abdulaziz Alajlan Sons Group, and Abdullatif Alissa Group Holding Company, among others.
The initial three plots of land have a total area of 83,535sqm. Furthermore, Mr. Esbaitah noted that the Company plans to develop over 990,000sqm of built-up area within the first 5 years of operations. Due to the significant demand for residential property in the Kingdom, the Company will place an emphasis on this sector, and capitalize of the opportunities in the Saudi Arabian.
