Saudi mall puts Dar Al Arkan in shop

Saudi Arabia's largest developer is on the cusp of completing the largest mall in the country, which will provide it with a steady cash flow to smooth out its volatile revenues. Dar Al Arkan's Al Qasr Mall in Riyadh is almost complete and has started commercial operations, said Asma Dakkak, an analyst at NCB Capital in Jeddah. Ms Dakkak said the 2.2 per cent decline in Dar Al Arkan's share price over the past week provides an attractive entry point into the stock, which is trading at 6.4 riyals a share. Ms Dakkak remains overweight on Dar Al Arkan with a price target of 10.1 riyals a share. Al Qasr Mall features a gross leasable area of 75,584 square metres - or about half the size of Dubai's Mall of the Emirates - including 8,780 sq metres already leased to Carrefour, the French retailer.The Al Qasr project, estimated to be worth 1.8 billion riyals, involves more than just the mall, with more 1,700 residential homes for sale, 1,318 residential units for renting, and significant commercial space."It's good to make the move to make some sort of recurring income, because [property] sales are volatile like any other developer's, depending on the timing of the delivery of the project," said Mostafa El Maghraby, an analyst at Global Investment House in Kuwait. "Recurring income irons out the volatility."Dar Al Arkan, established in 1994, is a master developer of large-scale projects, generally up to 5 million sq metres.Saudi Arabia's residential market suffers from undersupply. "We estimate that a current shortage of 700,000 units exists in the market and an additional 1.2 million new units will be needed by 2014, offering attractive potential for realtors," Mr El Maghraby said. Future Dar Al Arkan developments are concentrated in Riyadh and Jeddah, although the company's extensive land bank of about 32 million sq metres extends throughout the kingdom. From / The National