Saudi Arabia Real Estate: Bader Al-Saedan Discusses Trends and Upcoming Developments in Riyadh

Interview with Dr. Bader Al-Saedan, Managing Director of Al-Saedan Real Estate Co.

What are some of the current projects and developments you are working on at Al-Saedan?

Over the last few years, there has been a lot of momentum and high demand on the residential projects. Before, we did not really focus as much on the residential projects, but in the last three years that has changed. Building residential is different than big communities, so it is diversified. For these projects, before even finishing the construction they are already sold. Of course, we also have projects ongoing and coming up in other areas. We have an agreement with Marriott International to build four hotels. One is already completed in Riyadh, one is almost finished in Mecca, and another one is starting construction on the below ground level. Another one is still in the design phase. These are going to be huge projects. In Riyadh now, it is becoming a trend and there is a high demand for the high-end office spaces. We have already completed the Elegance Tower as a Class A office building. Now, we are in the design phase of a project for small, low-rise office buildings. Now, there is a really high demand in Riyadh city for the foreign companies that are moving to Riyadh to be their Middle East hub. This has created high demand for the office spaces and for the residential in the form of compounds. Expats often like to rent in a closed community.

Internally, our concentration is now more into rebuilding and restructuring the company from the inside as we are getting ready for the IPO. There are a lot of changes on the internal side concentrating on the IT, concentrating more on the governance. That is why I am slowly moving away from the management to the top management in the Board. This is one of the demands, or requirements actually, for the family business: to separate the ownership from the management or the administration of the company. That will give more room to be compliant and for the company to live on.

Who is the clientele that you are targeting? Is it more local, more foreign, or does it change from project to project?

We have high demand for local products as residential. But now, we are seeing more demand for the foreign companies moving to Riyadh. The mega projects in Saudi Arabia as a whole are attracting investors and foreign companies to work with the local companies in terms of the management, the construction, industrial, building materials. All these activities, whether it is residential, office, industrial, logistic, storage, always start from real estate. There is really a high commitment from our company to supply the needs of the market.

What makes Al-Saedan stand out from all the other players in the real estate sector? What are your competitive advantages?

Of course, we have a legacy as a family and as a company. We work in real estate and real estate development. Real estate business is always local wherever you go. You have to be with locals to work in real estate. Even within the same country, when you move to one city or region to another, you have to know the internal local issues, such as the regulations of the municipality, the society of the people living in the city that you are working in, and the macroeconomics of the country as a whole. Sometimes, if you have an idea or a project, you might not know where to put it. You have to find the land, you have to find the place, and sometimes you find land that is not suitable for the project. Because we are real estate developers and we are master developers, we have access to a variety of land at hand and the owners as well as other investors. We also have the expertise of relations with international companies. This helps us to really compete with the local companies. Real estate is not something that can be done with just working with one or two or three companies. It is a huge business with high capital demand. You have to join forces with other companies, even your competitors; otherwise, it is not going to work. You cannot do it alone.

Green construction and being environmentally conscious are a passion of yours personally. What is Al-Saedan doing as a company on the green side of making things environmentally friendly and being environmentally conscious in your projects?

It is a policy of the entire Al Saedan Group to be environmentally friendly. In our projects, we really concentrate and focus on energy saving which is very important. In Saudi Arabia, most days of the year, the temperature is really high. So, you have to think about saving energy, which is not an easy task. You have to get involved from the beginning. To design a building, you have to follow the sunrise, sunset, and the sun’s movement to the south and north. During inception of the project and during construction, you have to select the right materials for the heat insulation. You have to think of the power needed in all buildings like lighting, machinery, air conditioning, and all these types of equipment and using the best materials that can save energy. The big challenge when you start doing the construction is the excavation – how to move the excavation and to bring it out with the wind and the dust, etc. Sometimes there is a building you have to demolish and it is really difficult to get rid of these materials. You have to find a place to put them. We try to find the best solution for recycling the building materials in this case. Recycling is very important for the environment. When you plan it right, it is not something you lose money on. You might actually make money out of recycling if you really think about how to do it and work with people during the construction that can deal with those materials. This is the most important issue that nobody really thinks about. They just think about the construction, not the excavation, demolishing, etc. We face all these things during construction, especially when you build something downtown or in older towns or the holy cities. When you have to demolish buildings and then rebuild, you have to think about the green issue from the very beginning.

As a company policy, does this influence every step of the process from the first inception of design to handoff at Al Saedan?

Yes, of course, we always think about clean energy. We incorporate some solar energy as well into our projects. But in the case of the PV system and solar energy batteries, the only problem with these materials is recycling. They are not recyclable. This is really an important issue and we are waiting for the technology and science to improve. With the scientists working with the support of the governments of the world at a high level, we hope to soon have an option that is better and cleaner for our planet.

What are some success stories that you have enjoyed since the last time we spoke to you?

At the company level, the best thing I have done personally is not getting rid of the company, but having the company get rid of me. We have non-family members in the top positions of the company as CEOs, CFOs, etc. All the C-suite roles are held by non-family members now. As a family, we have moved to the Board, Executive Committees, and other committees. We make sure that the direction of the company and the steering is as planned and is correct and is continuous. Keeping the successes we had before is really difficult. We just want to make sure that nobody messes with the company as the company is carrying the family name. We are committed. It is really difficult to leave your name on a company and not think about the continuity or sustainability of the company. For me, this is really important and I hope that I can call it a success. As a company, we have signed and are planning to sign with foreign companies to come into Saudi Arabia and to reinvest. We have signed with Marriott International building hotels for them and then they manage those hotels. Now, we are working with a German group to come as developers in marine construction and management on the marinas, sports, maintenance of yachts and boats, and training for water sports. This is a really big project for us and we are excited.

What is your inspiration? What drives you to do what you do? You mentioned this weight of responsibility of a family company and this big family unit. But for you personally, what drives you to take on that responsibility?

I have been working in this company from before I even graduated from school, since the inception with my father at the beginning and his father. You get used to it and you want to keep doing it. That is why it is really a success to get out of the company, because it is really difficult. The most difficult part in a family business is to retire. You feel like you are home when you are working. When you have this feeling, you just want to be always at the desk writing, reading emails, talking to staff, team planning; it is really difficult to get away from it when you are used to it. When you are comfortable doing something, you want to continue doing it. That is what keeps me working. I see my father, my uncles who are much older than me, and they are still involved in business. It is not because they want to get more profits or more money. No, it is something else – they are enjoying it. When you enjoy something, you want to keep doing it. It is as simple as that.

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