Saudi Real Estate (Al Akaria) Logo
Real estate prices in Riyadh rose remarkably over the last five months, as demand outstripped supply during this period, Al Arabiya TV channel reported, citing Ibrahim Al Alwan, CEO of Saudi Real Estate Co. (Al Akaria).
He highlighted the need to work on price stability to enable the development of real estate units, considering that price inflation would harm the sector in the coming period.
Al Alwan further said that the board of directors' recommendation to increase capital came to achieve the company's five-year strategy, which aims to develop the current real estate projects.
"Al Akaria will allocate part of that liquidity to renovate its properties, most of which are concentrated in Riyadh," the CEO said, adding that major part of the funding will be used for expansion in Riyadh, in light of Riyadh's strategy.
The real estate developer's loans reached SAR 4 billion in the first half of 2021, while its capital stands at SAR 2.4 billion.
"The capital hike will be used to balance loans and capital," the top official said.
The board of directors approved, on Sept. 13, increasing capital through rights issue worth SAR 1.6 billion, Argaam reported.
Commenting on the rise in financing burdens in H1 2021 due to the suspension of financing fees capitalization for Al Wedyan project, Al Alwan said this procedure is considered an accounting treatment as this is one of the company's major projects. He added that the auditor decided not to proceed with the capitalization process, which will take place when the situation becomes clear and the area is redeveloped.
The CEO further said the one-off items were behind the accumulated losses incurred over the last years, expecting better results amid plans to improve profitability.
In August 2018, Al Akaria launched Al Wedyan project in Riyadh, with a cost of SAR 10 billion for the first phase. The residential project is located in Al-Malqa district in Riyadh over a total area of 7 million square meters. It will comprise residential areas for apartments and villas, a central park, an entertainment center, hotels, a shopping mall and education facilities, according to data compiled by Argaam.
Comments
{{DisplayName}}
{{ElapsedTime}}