UAE mega-developer opens up on multi-billion dollar expansion into Australia

At a time when eight Australian construction companies collapse every day, a Dubai-based developer has given the sector a vote of confidence in the form of billions of dollars poured in a new Sydney-based operation.

Construction insolvencies have surged to 2,975 in the 2023-24 period, a significant increase from the annual pre-Covid average of 1,570. The construction sector now accounts for 26.9 per cent of all insolvencies nationwide.

The bleak construction landscape has done nothing to deter UAE-based property developer Arada.

Arada currently has $2.5 billion worth of projects in its extended pipeline for its Australian operations. The company’s developments are located within the Inner West, South West and Hills Shire suburbs and will together add 2,500 homes to the Sydney housing market.

With significant land holdings, the sites will deliver extensive commercial and retail components, providing significant employment opportunities in the local community.

Founded in 2017 by two of the Gulf’s most established businessmen, Sheikh Sultan bin Ahmed Al Qasimi and Prince Khaled bin Alwaleed bin Talal, Arada has been led since inception by its Australian-born Group CEO, Ahmed Alkhoshaibi, with a scope of operations ranging from property development, retail, education and hospitality.

In a wide-ranging exclusive interview with API Magazine, Mr Alkhoshaibi discussed the company’s motivation in expanding into Australia, the design influences it will bring from the Middle East and the regulatory difference between the two regions.

API Magazine: As an Australian-born CEO of a UAE-based developer, can you please share a bit about your Australian heritage?

Ahmed Alkhoshaibi: I was born and raised in Sydney and have been involved in the real estate field since I was 21. In the early 2000s, I oversaw a series of successful smaller-scale projects across Sydney, including in Maroubra, Strathfield and Rockdale.

This allowed me to gain a strong understanding of the industry, from concept to design, and from sales and marketing to development and delivery. That experience served me well when I moved overseas.

What took you to Dubai?

I moved to Dubai in 2007.

At that time, many cities in the Gulf were in the middle of a major construction boom, that has to a certain degree continued up until today. In 2007, there was no city in the world growing as fast as Dubai, and for a young construction professional it was the perfect location for me to broaden my skills base, take on larger projects and take leadership roles in a number of different companies.

A particular area of focus for me in the early part of my time in the Gulf was the crane business.

After I founded a crane business in Qatar, I was fortunate to meet one of the region’s leading businessmen, Prince Khaled bin Alwaleed bin Talal, who remains both a business partner and a good friend.

Together we invested in a number of different companies all related to the construction sector, including Italy’s Raimondi Cranes, one of the world’s oldest manufacturing companies, which I’m proud to say has now become a global entity with sales all over the world.

I see you are ranked no.23 among UAE ‘power developers’ by Construction Business News. From where do you draw the creative inspiration that has culminated in this CEO role?

For me, setting up a developer was a natural step after working in so many different sectors that were so closely related. But at the same time, the landscape here in the UAE is extremely competitive; some of the biggest master developers in the world operate here, and many of them are part-owned by local governments.

At the time we launched in 2017, the UAE real estate market was actually trending downwards and as a new and private developer we had to ensure our strategy and processes were clearly defined right from the start.

Our vision was clear from day one. We believe that when people and spaces connect, great things happen, and we create spaces that allow people to enjoy happier, healthier and more meaningful lives. That’s both our compass and the source of our creative inspiration, so when we design our communities, we have principles we follow to make sure we stay true to our purpose.

These principles are wide ranging but include a dedication to landscaping, a requirement for great architecture and design, the importance of world-class facilities, careful stewardship of the local environment, and a dedication to after-sales service. All of these principles involve thinking strategically and on a long-term basis, which has really helped us stand out in a crowded local market.

In a relatively short time, we have achieved a lot; over 14,000 homes sold, valued at A$7.6 billion and 9,000 homes handed over.

What was the economic rationale behind choosing Australia for this expansion move?

We’ve achieved a certain level in the UAE, and we always said we would focus on the UAE first and then expand to Saudi Arabia, then Australia, then London. That was our roadmap. We have also said that we need to be in the top five developers in each market. Australia beat Saudi Arabia by a few months, but you see the need here given the housing shortage.

In Australia, our goal is to transform communities that are in need of urban renewal, and we’re ready to work hand in hand with local authorities to deliver on the strategic planning the government has already put in place.

We’ve already invested our own resources – so far A$2.5 billion - to achieve the best results for all stakeholders. By acquiring the most strategic sites, we’re setting a benchmark that will define the future character of each area. We've put the foundations in place and are now ready to work with local authorities to deliver exciting new urban destinations.

The UAE is renowned for its innovative architecture, design and ambition. Will that influence be evident in the Australian properties?

We’re living in a global world and are headquartered in the UAE, which is one of the most diverse and multicultural regions with over 200 nationalities.

As an organisation, Arada has been fortunate to be exposed to these different cultures and we have been able to really differentiate ourselves in the UAE with innovative products addressing different needs.

Creativity is an important part of the development process but it’s even more crucial for master developers, especially when you’re trying to create fully integrated communities. At Arada, we can draw on the experience of our 40-strong architectural team but we’ve also worked with some of the biggest names in this space, including Zaha Hadid Architects and the Pritzker Prize-winning Tadao Ando from Japan.

In Sydney, we’ve already teamed up with Woods Bagot and Turner and I am confident that the designs for our first projects will really set the standard in terms of quality, longevity, landscaping and amenities for all our projects in Australia.

How does the scale of the Sydney project compare to your UAE-based projects, such as Aljada, Sharjah’s largest ever mixed-use megaproject?

In the UAE, we have a wide range of existing projects, ranging from what I would call destination megaprojects to villa and townhouse communities and apartment complexes. The largest of these Aljada, is spread over a 2.2 kilometre plot and is one of the biggest and most ambitious projects in the UAE, with 25,000 apartments complemented by a huge variety of world-class amenities including hotels, schools, shops, sports facilities, office space and entertainment, all set within a beautifully landscaped environment.  

Our initial sites in Sydney are not at the same scale as Aljada but do compare in size to some of other locations we are working on in the UAE, including the Dubai International Financial Centre, Dubai Harbour and The Palm Jumeirah.

We will be revealing full details of our initial project pipeline following regulatory approval but what I can say is that they will all follow the design principles that have brought us success in the UAE.

Are there particular challenges tackling projects here when Australia’s overall building industry is under such strain?

We are fortunate that we’ve done really well in the UAE. We have a strong balance sheet, a good equity-to-debt ratio and a long-term strategy.

We’ve already been investing our profits back into hard assets in the UAE, which gives us recurring revenues. So we’re also preparing for any kind of downturn because property is a cyclical market. You diversify your portfolio, you build up other revenue streams, so when the market goes down, you’re in a position to purchase land, which is of course the best time to buy. 

But there are a lot of challenges. Construction costs have gone up drastically, but with economies of scale, the smaller the projects are, the harder it is to get the costs down – but I don’t think it’s impossible. We’re not in a hurry – we can even start building without selling, and we’ll start building in the middle of next year.

How do the bureaucratic and environmental processes in Australia compare with working in UAE?

Every country has regulatory requirements and obviously Australia is no different. In the UAE, we have worked with the different regulatory regimes that exist even within the country and have a great track record of on-time delivery.

In Australia, we have already built up a core team of 20 individuals within the Pyrmont office, who together have over 200 years of experience in the Sydney housing market. So, we’re already very conscious of local regulations and we meet and even exceed those where possible. For example, while there is a regulatory requirement for landscaping, our projects will significantly exceed the parameters required by those regulations.

What’s next in Australia after this project?

Realistically, our strategy in the next three-to-five years is to have around A$5 billion of developments, focusing on the metropolitan area, city growth corridors and public infrastructure. The more long-term idea is do something more like what we have done in the UAE – mixed-use megaprojects, or full ‘live, work, play’ destinations.

It’s hard to say at this point whether our Australian projects will reach the size of those in the UAE - maybe a third of that size - but we will be looking at integrated living horizontally, not vertically.

Essentially we are open to ideas; you can plug this type of mixed-use project into an existing community or you could do something new.

I want to show that Arada has delivered strategic projects in specific locations, and then we can look at expanding to major cities throughout Australia.