By Souhail Karam
Two-year timetable to obtain credit rating and finance expansion plans.
Saudi developer Al-Oula plans to sell Islamic bonds worth 3 billion riyals ($800 million) within two years to help finance projects both in the kingdom and in the region, its top executive said on Sunday.
"We have a sukuk issue programme which is expected to start within one to two years... with a first tranche of 3 billion riyals," Abdulaziz Al-Duailej told Reuters.
"We have mandated financial advisers to get us a rating ahead of the issue," he said on the sidelines of a real estate conference in Riyadh.
Launched in 2002, Al-Oula plans to independently build 20,000 housing units in Saudi Arabia by 2013 at a total cost of 20 billion riyals, Al-Duailej said.
Its subsidiary Al-Oula Investment plans at least another 20,000 units in the kingdom through joint ventures with UAE's Emaar Properties and Egyptian developer Talaat Moustafa Group, he said.
The project with Talaat Moustafa involves building 4,200 housing units in the capital Riyadh. Projects with Emaar are located in the Eastern Province, the Red Sea port of Jeddah and the holy city of Mecca, Duailej said.
He declined to give an estimate on the cost of the projects.
"These projects are under construction or under final design with the investment venture," he said.
Another subsidiary, Dubai-based Al-Oula International, is managing the firm's projects outside the kingdom.
"The main focus is the MENA region with emphasis on the Gulf market. We do have investments in the United Arab Emirates, Dubai, Umm Al-Quwain, Bahrain, Syria and Egypt and we are looking for other opportunities in the North African market as well," said Al-Duailej, declining to elaborate.
Al-Oula also owns a land acquisition and trading firm and plans a mortgage-financing unit.
It also plans to raise cash from an initial public offering but Duailej said current market conditions were not favourable for such listing.
"We are preparing the company for an IPO... We don't think the time is right now, we are thinking about a timeframe of three to five years from now," he said.
Saudi Arabia, by far the largest country in the Gulf Arab region, has a deficit of 400,000 housing units and will require 165,000 more units next year, with demand growing 3.5 percent per year, Al-Duailej said. (Reuters)