UAE developer Arada says 'depressed state' of London market behind UK move

Sharjah developer Arada has acquired UK-based Regal, with an initial commitment of Dh2.5 billion ($680 million) to the London property market, and is looking to launch new projects in Saudi Arabia and Ras Al Khaimah next year as part of its expansion plans.

The company has bought 75 per cent of Regal, a London based mixed-used developer, which has a pipeline of 10,000 residential units across 11 projects, with a plan to triple that number over the next three years.

“A lot of people are saying or would question this decision [entering London] … [since] it is currently probably in a depressed state when it comes to property prices or sentiment, but that's when we like to enter markets,” its group chief executive Ahmed Alkhoshaibi told The National.

“When you enter in a market when it's not at its best, you can find the right opportunity to acquire the right sites at the right price to deliver on your vision.”

The company plans to fund the new London deal through its own equity, he said. The amount that Arada is investing will be used jointly for the acquisition of Regal, as well as the development pipeline and for buying more sites in London, he added.

The deal opens the developer “to a big market and there are many advantages for Arada”.

“One is staying strategically to our business model, which is to expand outside the UAE once we initially reach a certain level of success in the UAE,” Mr Alkhoshaibi said.

Last year, Arada, a joint venture between KBW Investments ― a company controlled by Saudi Arabia’s Prince Khaled bin Alwaleed ― and Sharjah-based Basma Group, made its international debut by announcing residential projects worth Dh6 billion in Sydney. It also opened an office in Australia’s most populous city as part of its expansion plans.

Arada is also looking to launch new projects in Saudi Arabia and is in talks with sovereign wealth fund, the Public Investment Fund, to start a new project in the kingdom.

“We’ve been discussing with PIF on a few projects; these talks have gone on, have matured, and are continuing. I'm confident that one of these mega projects, of the PIF projects, will come to fruition,” Mr Alkhoshaibi said.

He did not provide further details but said it will be a “significant size, mixed use, residential project”.

Saudi Arabia is expected to be the next big market for property development as the kingdom continues to carry out reforms to attract investment.

Earlier this year, Saudi Arabia updated its rules to allow foreigners to buy property in specific zones in Riyadh and Jeddah, with special requirements for home ownership in Makkah and Madinah. The decision is expected to further boost the kingdom’s property market.

Mr Alkhoshaibi also confirmed that the developer plans to launch a project in Ras Al Khaimah next year as the emirate continues to attract new investors on the back of the Wynn Resorts development.

The value of the RAK project, with a hotel and residential units, is expected to be in the range of Dh3 billion.

“We acquired land in Ras Al Khaimah a few months ago on Al Marjan Island and are launching our first project,” he said.

Developers including Abu Dhabi’s Aldar Properties, Dubai Investments, Dar Global and Damac Properties are also lining up new projects in RAK as demand for property remains strong in the emirate.

Going strong but slowing down

The UAE’s property market has been booming amid a range of government initiatives and strong economic growth boosted by non-oil activities.

Arada has achieved total sales of Dh13 billion so far this year and is expecting to reach close to Dh20 billion by the end of December amid growing sales in the UAE, according to Mr Alkhoshaibi.

Last week, it sold out 1,051 homes valued at Dh3.6 billion as part of the first two phases of Masaar 3, its forest community in Sharjah. All 2,000 homes at its Masaar 2 development, which was launched in February this year, were sold out in three hours.

“The UAE has been resilient and defying all the statistics or the odds saying that the market will slow down, we feel that the market is really driven a lot this time, by end users, based on underlining demand from the net positive immigration and the increasing demand for people around the world to live in the UAE,” Mr Alkhoshaibi said.

He expects the property market to continue maintaining strong growth this year, but expects the momentum to slow down.

“We’ve had very strong growth the last few years. Will we maintain that same rate of growth? No, of course not. There is going to be a slowdown, but I feel that we still have, based on the demand and based on the supply that's coming to the market, there’s still room for more growth,” he said.

He expects single-digit growth in 2026, compared with double-digit growth this year.

Ratings agency Fitch in a report in May said the real estate market in Dubai is set to enter a “moderate correction” in the second half of 2025 because of a record number of project launches.

The correction – a phase in which price of an asset declines by 10 per cent or more – would run through 2026, but is not expected to exceed 15 per cent, as the strength of the prime real estate segment will support the rest of the market, the New York-based ratings agency said.