Al Akaria expects positive performance to continue on non-core land sales

Saudi Real Estate Co.'s (Al Akaria) positive performance is expected to continue in Q1 2025, backed by steady occupancy rates and the continued recognition of real estate development revenues, mainly the Fai Sedra-1 project, Acting CEO Khalid Alsehaibany told Argaam.

 

Some non-core land sales, which are expected to show in Q1 2025 results, will boost profitability and enhance the efficiency of asset deployment. Al Akaria adopts a clear plan that aims to bolster returns and operating revenue.

 

Commenting on Q4 2024 results, the executive said the company continues to take steady steps to achieve its strategy, aiming to maximize shareholder returns, diversify income sources, maintain a balanced and healthy capital structure, and ensure efficient operational performance.

 

Alsehaibany stated that the Q4 2024 financials were exceptional in terms of the net profit attributable to the parent company’s shareholders, along with significant improvements across all operational segments throughout the year.

 

He noted that the company is currently developing high-quality projects aimed at sustaining performance improvement, including the Al-Reef Residential Community project in the Diplomatic Quarter and the Tilal Riyadh project. Both projects are slated for completion and operation in 2026.

 

Three key segments drove fourth-quarter revenues, with most significant contribution coming from real estate sales at 51% of total revenues. This was primarily due to the launch of sales in the final phase of residential plots at the Al Akaria Park project in the Al Murjan district, eastern Riyadh, as well as the high completion rates in the Fai Sedra-1 project within the ROSHN mega project.

 

The infrastructure projects segment followed, contributing 35% of total revenues, driven by higher completion rates in infrastructure projects, particularly those carried out for the Diriyah Development Co., including excavation work for parking lots and the metro station. Meanwhile, rental revenues made up 12% of total, reflecting improved revenue performance.

 

The Acting CEO highlighted that higher occupancy rates, coupled with an increase in the average rental price per square meter, significantly contributed to the company's improved financial performance. Rental business revenues grew by 12% year-on-year (YoY) in 2024, adding SAR 37 million.

 

Al Akaria is working to improve the performance of its income-generating assets by renovating existing assets, such as the Al Akaria Buildings 2 and 3 and Gate 6 in Olaya Oasis project, in addition to some units in the Diplomatic Quarter. These assets will boost their returns and contribute to improving financial performance, Alsehaibany assured.

 

He stressed that the company's strategy to enhance revenue growth from infrastructure projects through its subsidiary, Saudi Real Estate Infrastructure Co. (Binyah), stems from its focus on targeting mega infrastructure projects in Saudi Arabia, providing strategic opportunities bolstered by increased government spending.

 

The rental segment’s strategy focuses on continuously enhancing income-generating properties through renovations, ongoing improvements to services and facilities, and leveraging the strategic locations of company-owned properties, particularly those near metro and bus stations within Riyadh's public transportation network.

 

Argaam data showed that Al Akaria’s profits surged to SAR 215.1 million by the end of 2024, compared to SAR 67.6 million in the same period of 2023. Q4 2024 profits amounted to SAR 188.2 million.