Arada makes Saudi debut with USD 3.8 bn Riyadh project, targets 100k homes

Sharjah developer Arada is making its Saudi debut with a USD 3.8 bn residential project in Riyadh. The company plans to develop 100k homes across the Kingdom over the next three to five years, with further projects planned in Jeddah and Makkah, CEO Ahmed Alkhoshaibi told The National. That’s half of Arada’s target to develop 200k homes across its markets over the same period. Arada is co-owned by Saudi businessman Prince Khaled bin Alwaleed’s KBW Investments and Sharjah-based Basma Group.

First stop, Riyadh: The developer’s debut project will span 2.5 mn sqm in the capital’s Al Rimal district, with 3.5k villas and townhouses, alongside retail, education, and leisure facilities. Construction is expected to begin in mid-2027, with completion targeted within five years.

Arada KSA, formed in partnership with Saudi property investor Xtopia, has access to a 10 mn sqm landbank across Riyadh, Jeddah, and Makkah valued at AED 49 bn.

Al Rajhi Capital will fund most of the project: The project will be financed through a CMA-regulated fund managed by Al Rajhi Capital. Arada will put in some equity, but most of the funding will come from the fund and the bank, Alkhoshaibi, who chairs the joint venture, said.

Why it matters: Saudi Arabia is pushing to raise homeownership among citizens to 70% by 2030, up from just over 66% at the end of last year. It also opened designated zones in Riyadh and Jeddah to foreign buyers earlier this year. Alkhoshaibi says demand from Saudis, backed by the government’s homeownership push, is the main draw.

What’s next: Alkhoshaibi expects to announce another Saudi project before the end of the year.

REMEMBER- Arada has been on an expansion spree: Earlier this month, Arada partnered with Aldar on an AED 15 bn partnership marking its entry into Abu Dhabi’s residential market. It’s also expanding in Australia, where it has a AED 5 bn Gold Coast project in the pipeline, alongside a USD 7 bn planned development in Syria and a growing London portfolio. Its total development pipeline now stands at AED 185 bn across five markets, comprising more than 70k homes.

MEANWHILE- Arada is refinancing its 2027 sukuk: Arada is offering to buy back, at face value, its outstanding USD 411.7 mn of trust certificates due 2027, according to a tender offer announcement (pdf). The buyback depends on a new USD sukuk that Arada expects to price before the tender closes on 26 October. Arada will retire up to the size of the new issuance minus USD 200 mn, so the transaction raises at least USD 200 mn in new money on top of the refinancing. Holders have until 26 October to tender, and settlement is expected on 2 November. In September, holders approved a new call right, so Arada can redeem any certificates that aren’t tendered. Emirates NBD, Mashreq, and Standard Chartered are transaction managers.