Arabtec Holding Co., the United Arab Emirates’ largest construction company, established a new subsidiary to develop real-estate projects in the Middle East and North Africa.
Arabtec Real Estate Development Company will start building new homes in Abu Dhabi and Dubai, with plans to expand into other countries of the Gulf Cooperation Council and the Middle East, the company said today in a statement. Arabtec also plans joint ventures with other real-estate developers and investors in the U.A.E.
“With the real estate industry now showing strong signs of recovery, expanding into the development market presents itself as an attractive proposition,” Hasan Abdullah Ismaik, Arabtec’s chief executive officer, said in the statement.
The company is creating the unit to access higher-margin businesses than construction. Arabtec said it’s real estate business would focus on building affordable homes in the U.A.E, Saudi Arabia, Egypt, Algeria, and Morocco. The shortage in affordable housing units is estimated by the company to be more than 3.6 million units across the Middle East and North Africa.
The company, which helped build the world’s tallest tower in Dubai, said it has a backlog of construction projects worth about 30 billion dirhams ($8.2 billion), and that it’s searching for new investments and partnership opportunities. The company is also planning talks with Egyptian authorities about developing affordable housing projects in the country.
Abu Dhabi sovereign wealth fund Aabar Investments acquired 21 percent of Arabtec in 2012 and Khadem Al Qubaisi, the investment fund’s chairman, holds the same position at Arabtec.
Arabtec has also formed a joint venture with Samsung Engineering, Arabtec-Samsung Engineering, to work on large-scale projects in the oil and gas, petrochemicals, industrial and power and water industries in the Middle East.