From the shores of the Red Sea in Jeddah, Saudi Arabia, Mowaffaq Al Hashimi sits down to discuss the growth of his career in real estate, including the reasons for founding Saqifat Al Safa in 1996 and focusing on certain business disciplines. Gaining exposure to both the US and Saudi markets throughout his academic and professional lives, he maintains a deep knowledge of international real estate investment, finance, and development, as well as how to properly assess the risk vs. return of a given opportunity. Saqifat Al Safa itself provides comprehensive real estate services in Saudi Arabia, the Gulf, and Levant ranging from development to marketing & sales and property management. It is an active participant in existing and development projects across residential, commercial, hospitality, industrial, and mixed-use product types. Most recently, Mowaffaq and his company have become involved with a program launched by Saudi Arabia's Ministry of Housing to provide affordable homes on a large scale.
Dealmaker Highlights
- Saqifat Al Safa's business model as a real estate service provider encompasses numerous disciplines that add value to Jeddah's market.
- COVID-19 slightly disrupted the timeline for residential development projects backed by the Ministry of Housing. However, these projects, which target low to middle-income Saudi earners, are moving forward again.
- Reacting to the pandemic, the Saudi government implemented a program to pay citizens a portion of salaries while remaining at home, which helped to reduce anxiety and minimize layoffs.
- Now that the lockdown is over, the volume of real estate transactions has nearly reached the same level as this month last year. With this said, a recent increase in the VAT from 5% to 15% may force prices downward in the near term.
- Levels of market distress are relatively low, as the government negotiated a deal with Saudi banks to grant forbearance to homeowners. On the retail side, many landlords agreed to tenant rent relief requests while customers start to re-emerge.
- With regard to the permitting and entitlement process for a development project, it does not take long to obtain the required permissions as long as existing zoning is not violated. If a project is located in an outlying area of the city, a land rezoning process is significantly easier than would be the case at an infill site.
- The development timeline for housing projects is set at 18 months by the Ministry of Housing. Once the contract is finalized, developers shoulder the responsibility to complete the project within this time frame. The bank that a home buyer uses for a loan will also provide developer financing for the relevant project.
- Borrowers in Saudi Arabia have the choice of conventional or sharia-compliant financing. Certain banks are more geared to one versus the other.
- Mowaffaq makes recommendations for lodging, cultural sites, recreation centers, and restaurants across the gastronomic spectrum.
Contact Information
Email: mah@saqifatalsafa.com
LinkedIn: https://www.linkedin.com/in/mowaffaq-al-hashimi-aa343533
Website: https://www.saqifatalsafa.com/en
