By Andy Sambidge
Red Sea Housing teams up with South American developer to provide affordable homes in Gulf kingdom
Red Sea Housing Services Company has announced a strategic alliance with Direcional Engenharia, a Brazilian developer, to look at providing affordable housing solutions in Saudi Arabia.
The companies have signed two agreements covering technical services and a joint venture between the two parties, a statement said.
Joseph Vecchiolla, CEO and managing director of Red Sea Housing, said: "We look forward to working closely with Direcional Engenharia to deliver affordable residential homes of unmatched value, quality and scale.
"We are very optimistic about this alliance which combines the Red Sea's vast knowledge, its local and global experience with Direcional's expertise of developing high quality affordable communities that will offer Saudi families access to affordable homes."
Saudi Arabia's real estate and construction sectors have recently witnessed a boom, driven by the rising demand for homes for local residents. According to recent reports, the kingdom will need nearly 1.25 million residential homes by 2018 to keep pace with its growing population, which is expected to reach 37.2 million people by 2020.
To ensure adequate supply, the Saudi Ministry of Housing has adopted an ambitious target to build 500,000 affordable homes for Saudis, which has recently entered the implementation phase.
Direcional Engenharia has built a reputation for delivering affordable homes under the country's 'Minha Casa, Minha Vida' (My House, My Life) programme.
In 2014, the developer delivered an average of 1,540 homes per month to meet the needs of families throughout Brazil and generated sales of more than $575 million.
Ricardo Ribeiro Valadares Gontijo, managing director of Direcional Engenharia, said: "Saudi Arabia has emerged as a preferred destination for real estate investment within the GCC due to the large demand, particularly from the residential segment. We believe the need for affordable homes will grow at an unprecidented rate between 2015 through 2020 and beyond.
"Direcional Engenharia is fully committed to working closely with Red Sea Housing which has long been known for its swift delivery of affordable housing solutions throughout Saudi Arabia and beyond."