Saudi Arabia's biggest property developer Dar Al Arkan has listed its global unit Dar Global on the main market of the London Stock Exchange, as it seeks to expand its investor base.

Following the listing, the company was valued at 2.25 billion Saudi riyals ($613 million), it said in a statement on Thursday.

The initial public offering follows a corporate reorganisation of the subsidiary, as it seeks further international expansion.

The listing makes Dar Al Arkan among the few home-grown brands from Saudi Arabia to list on the LSE, the statement said.

“London is the ideal venue as Dar Global looks to access a larger pool of investors and partners to support its expansion ambitions in the global luxury real estate landscape,” said Yousef Al Shelash, chairman of Dar Al Arkan.

Dar Global was established in 2017 to develop the company's international assets.

The company, which focuses on developing projects comprising luxury second and holiday homes, currently has 11 premium projects in six countries. Three of its developments, including Urban Oasis, the Da Vinci Tower in Dubai and Sidra in Bosnia, are set to be completed in the fourth quarter of this year.

Dar Global, which has collaborations with luxury brands including Missoni, W Hotels, Versace, Elie Saab, Automobili Pagani and Automobili Lamborghini, also has an “extensive” pipeline, Dar Al Arkan said. 

Dar Al Arkan, the largest developer in Saudi Arabia, has delivered 15,000 residential units, more than 500,000 square metres of commercial space and is expanding in its home market, the wider Middle East and Europe.

The company has more than $8.53 billion worth of assets.

In November, the Riyadh-based company said it had teamed up with The Trump Organisation for the development of a resort that will include residential villas, a hotel and a golf course in Muscat. 

The Trump Resort will be located at Aida, a 100-metre-high hilltop development situated directly by the sea.

Dar Al Arkan and the Oman Tourism Development Company, better known as Omran, are also developing a $4 billion mixed-use Aida real estate project in the Omani capital.

It is also planning to start a new residential project in Abu Dhabi next year, as the UAE's property market bounces back from the pandemic-induced slowdown.

Liberum Capital Limited acted as capital markets adviser on the listing and Norton Rose Fulbright acted as legal adviser.

Business activity in Dubai's non-oil private sector economy continued to improve last month as output expanded at the sharpest rate in four months.

The emirate's seasonally adjusted S&P Global purchasing managers' index reading in February slipped to 54.1, from 54.5 in January, but remained well above the neutral 50 mark separating expansion from contraction.

Despite the softer pace, the reading “was still indicative of a robust performance for the non-oil sector, as new orders and activity continued to rise sharply”, said David Owen, a senior economist at S&P Global Market Intelligence.

“Output growth picked up from January and remained well above the survey trend.”

Businesses attributed output increases to new clients and continuing projects, according to the survey.

The construction sector registered its “strongest upturn” in output since June 2019, while wholesale and retail and travel and tourism both registered faster increases in activity, compared with January.

Dubai's economy expanded by 4.6 per cent on an annual basis in the first nine months of 2022, with wholesale and retail trade accounting for 24.1 per cent of its gross domestic product, according to data from the emirate's statistics centre.

Emirates NBD estimates Dubai's full-year 2022 growth at 5 per cent and expects the emirate’s GDP to grow by 3.5 per cent in 2023.

The tourism sector, a key component of the emirate's economy, has made a strong rebound from the coronavirus-induced slowdown.

Dubai hosted 11.4 million overnight international visitors in the first 10 months of the year, up 134 per cent from the same period in 2021, according to latest government statistics.

It property market also had a record-breaking year, with further price increases registered in December.

The market recorded 90,881 transactions in 2022, exceeding the previous high of 81,182 in 2009, property consultancy CBRE said in its Dubai Residential Market Snapshot report.

Despite expenses rising, companies reduced their output charges to support demand conditions, with costs falling for the seventh month running, although the rate of reduction was modest and the softest since last November.

Non-oil businesses benefitted from an improvement in supplier delivery times, which picked up to hit their highest level since August 2019.

Panellists were also broadly more confident about future activity, with the degree of optimism concerning the next 12 months at its highest since June amid expectations that improving market conditions will support higher activity, according to the survey.

“Businesses were also more optimistic … reflecting confidence that demand conditions will continue to improve and avoid disruption from a weaker global economic climate,” said Mr Owen.

Both times, the rent stipulated by the Real Estate Regulatory Agency (Rera) index was higher than what was mutually agreed.

As the tenancy agreement ends in March, my tenant approached me for contract renewal in January.

Since rents have gone up, I cited a higher amount of Dh55,000, which is currently the market rate for similar units. 

However, he suggested a rent of Dh48,500 and we could not arrive at a mutual agreement.

My tenant sent an email last week saying that he visited the Rera office and filed a rental agreement dispute.

How can I deal with this situation, as it is difficult to pay the service charges and rent the apartment at a rate acceptable to the tenant?

I am also thinking of selling the property. What are the options to get this apartment vacant?

How does Rera decide in such cases? What needs to be done to ensure this lease is not renewed in 2024? SI, Dubai

Answer: In these times when the market is very strong, I advocate all parties to reach mutual agreements that sometimes go beyond what the law states is allowed.

The law is there as a guide, but it’s always followed by the words, “unless otherwise agreed”. It is this term that determines what actually takes place.

I understand your frustration in wanting the current market rate as rent. However, you have to take a few things into consideration.

The rent you seek at renewal is the full market rent and it is not indicative for renewals because this is a vacant unit rental price. When a tenant is in situ, the rents are not at the same level as market rates. 

I understand your financial constraints, especially with service charges or mortgage payments. But this is no reason to request what is not allowed.

The Rera rental calculator is designed to offer both landlords and tenants a guide to future rental increases when the market is on an upward trajectory.

But it doesn’t mean that either party has to stick to it verbatim, it is just a guide to assist in reaching an agreement.

I have to agree with the tenant because he has suggested a figure as stipulated by the rental calculator, although less than your desired amount. This shows willingness on his behalf.

If a case is taken to the Rental Dispute Settlement Committee (RDSC), a judge could potentially look at who is being reasonable.

I suggest another round of negotiations, but keep in mind that, according to the law, your next renewal rent should be no more than Dh46,000.

The offer the tenant made is 15 per cent more, which in any one year is fair.

I cannot tell you what to do, but having a good tenant, who gives no trouble, is also worth their weight, so bear this in mind in your future negotiations.

If you wish to sell, you can send a 12-month notification of eviction citing the reason as property sale. This must be sent either via notary public or registered mail.  

The actual amount will be determined closer to the date of renewal and according to the guidelines of the Rera rent calculator.

If, at the time of renewal, you do not agree with the proposed amount but the new amount is in line with the law, you will have no alternative but to vacate, especially if the landlord insists on this increase in rent.

However, if the increase is more than the permissible amount that the law states, you can contest this by filing a case at the RDSC.