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16 April 2024

Real estate market unlikely to suffer due to rising costs

By Parag Deulgaonkar



Rising costs will have no significant impact on the property market, especially the UAE that has a very stable economy, a senior Snasco executive has said.

The Saudi Arabia-based property developer is looking to launch projects in Jordan, Abu Dhabi and Algeria. “We have an expansion strategy in place, and are currently exploring opportunities in Jordan, Abu Dhabi and Algeria.

We plan to invest whenever and wherever we see opportunities that serve our goals,” Snasco Chairman Saleh Al Sorayai told Emirates Business.

The company is currently focusing on its Sharjah project – Sharjah Investment Centre – as there is much to be done in terms of planning and infrastructure development, Al Sorayai said.


Do you plan to acquire more land in the UAE and which emirate do you plan to focus on?

The UAE as a whole continues to be a land of opportunity, given its stability, sound fiscal policy and growth potential. We don’t, however, limit our investment strategy to any emirate, rather by growth potential and usage type.

Currently, we are focusing on our Sharjah project, as there is much to be done in terms of planning and building infrastructure there. Our biggest current project is the Sharjah Investment Centre.

What is the total value of projects Snasco has launched to date across the various countries in which it operates?

Our investment strategy is multi-faceted. We either enter multi-billion-dollar projects through joint ventures or we fully own or develop. Currently, we have either signed or are in the final stages of negotiations for projects in the UAE, Saudi Arabia, Jordan and Algeria, which we expect to finalise during this year.

There is a lack of talent and experienced people in the real estate sector. Have you been able to overcome this problem?

You will find that the issue of talent is a global challenge across all industries. Although populations are growing, there are limited numbers of specialised, experienced professionals; and the same is certainly true of the property industry and all its associated sectors.
We have not found all the people we require within the deadlines we’ve set for ourselves. However, we have filled or are filling the vacancies we have.

It has become clear to us throughout the process that financials are not the key drivers, but what matters are issues such as working environment, recognition and a clear scope of work. Our focus on transparency and structure, coupled with our reputation, have helped us get direct submissions and, more significantly, quite a few referrals.

Are you planning to raise debt for your multi-billion dollar projects?

These are strategic decisions that take place only after we see scenarios presented to us in feasibility studies and discussing the same with our board of directors and/or partners in any given venture. We have a diverse portfolio and sources of funding reflect that diversity. It is early to discuss private equity funds.

Do you believe it is the right time to borrow from the market since the US Federal Reserve has cut rates further?

Certainly, if borrowing is part of a company’s business requirement, the current situation is more favourable as it costs less for an enterprise seeking to manage its cash flow.

Is incorporating high-end technology a way to overcome competition or a way to market your product?

Technology is a means to an end so we certainly believe in applying technologies that would make our clients’ life or work experience more comfortable. We also use technology to ensure more environmentally safe building processes.

Some developers have built high-end towers with almost futuristic technologies and this strategy impacts price as well as whom one targets. There will always be an audience for such properties; and we have not ruled out such an approach.

However, we are currently focusing on the infrastructure development of our mega-project, the Sharjah Investment Centre. We are in the feasibility stage of buildings, so it is premature to determine what materials and technology would be used.

How much do you expect prices of raw materials to go up this year? How are you planning to offset the cost escalation?

As the world becomes a smaller place in terms of modern technology and international business relations, there are too many factors contributing to the cost of running any business. We may see increases, since costs are on the rise in every economic sector across the world.
As for the numbers, that remains to be seen. Fortunately, the UAE enjoys one of the world’s more stable economies, and so we do not anticipate cost issues will significantly impact the market’s growth this year.

Any plans to acquire international companies as your rivals have done?

We have a clear vision and business philosophy regardless of how others may act. We have an expansion strategy in place, and are exploring opportunities in Jordan, Abu Dhabi and Algeria. We will invest whenever and wherever we see opportunities that serve our goals as well as add value to our investors, end-users and the community.

Do you expect the regional property market to cool down over the coming years?

There is still an enormous amount of room for further development across the GCC, including the UAE. In years to come, the market will mature in all sectors, from more sophisticated mortgage financing options to consolidated brokerage firm mergers. But this means that the market will restructure itself, not slow down.

Is harmonisation of property law an urgent need in the UAE?

The question of property law is a complex one as it covers both commercial and civil matters. It is clear that emirates such as Sharjah, Abu Dhabi and Dubai are leaders in exploring this matter.

Even though some quarters may want to push for a more dramatic change, all the emirates are not succumbing to pressures that contravene their obligation to study the matter professionally and to make informed decisions.

An issue such as property law can take years to fully explore and it is worth noting that many of the industrialised nations do not have standardised, nationwide legislation, specifically because each region has its own circumstances to consider.
It is at least reassuring that the Emirates has honoured all the laws it has issued, which is further proof that the UAE has a stable investment environment.

Since getting good contractors is becoming a difficult task, do you plan to start your own construction company?

Qualified contractors are always ready to work with companies that conduct themselves professionally, so we have had no issues in this regard as our relationships and reputation have helped us ensure positive commitments from our colleagues in the industry.

We understand the challenges they face and pay close regard to the appropriate processes required to ensure the smooth implementation of projects.

This is visible in the smooth progress of our project with Darwish Engineering Emirates, wherein all works are progressing according to schedule.

What is the status of your projects in the UAE and do you expect any delays?

We have been fortunate in this regard, generally due to having done the necessary research before launching any of our projects and having planned realistically.

We are very happy with the progress being made on current projects, and do not foresee any complications resulting in delays.

Would you like to share your success with the public by launching an initial public offering?

We constantly evaluate our business strategy, but have made no decisions in this regard. Nevertheless, it remains and option for us as we believe in the principle of partnership and providing others with the opportunity to share in our growth and success.



Saleh Al Sorayai

Chairman of Snasco


Saleh Al Sorayai, Chairman of Snasco, is a prominent Saudi businessman. He returned to Saudi Arabia in early 1980s and started his business after graduating from the United States.

In line with the current growth in the GCC real estate sector, he established Snasco Property Development and has been instrumental in the conception and execution of some of the region’s most prominent developments, including the Emirates Modern Industrial Area in Umm Al Quwain.

He is now planning to take Snasco to new markets and develop mega projects that will benefit the entire community and the region as a whole.