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Hind Al Soulia - Riyadh - DUBAI — The impact of the COVID-19 pandemic is being felt in major industries in the region, including the real estate market, where developers are eyeing a reduction in unit prices by as much as 25% and company mergers to minimize business risks and significantly increase the ease of doing business.
As uncertainty continues, real estate developers are deploying a range of measures and policies to mitigate the ongoing challenges, succeed in strengthening their position and deepen their relationships with their employees, investors, end-users and other stakeholders.
Eng. Marwa A. Murad, managing director of Maximiliano Development Management Services (MDMS), said: “One of the major risks facing the real estate market is the inability of buyers to pay the installments so strategies must be adopted such as the reduction in unit prices by 25% in the event of cash sales and small developers who may face the risk of bankruptcy might consider merging with another developer to protect its business.”
Since the virus outbreak, there has been a stiff competition between real estate developers and it will intensify as the unprecedented crisis has created a supply-demand imbalance in the sector.
Murad adds: “The risk facing the real estate market is the inability of customers to pay the installments, thus causing a delay in the construction work. As a result, developers may require a shorter period for the installments which eventually leads to an oversupply of units, thereby creating a negative business cycle.”
“The depth and breadth of the coronavirus outbreak’s economic impact on the real estate sector are still uncertain but real estate players will be well served to take immediate action to improve their businesses and also keep an eye on a future that could be meaningfully different,” said Murad.
MDMS is a key player in the growing construction industry in the Kingdom of Saudi Arabia. During the last three years, the company has been working closely with the National Housing Company to develop housing projects for Saudi citizens.
MDMS had collaborated with the National Housing Company for the sale work of the Murcia project, one of the largest projects in Riyadh, which is the construction of more than 5,000 housing villas and apartments. MDMS is the sales consultant for the Murcia project phase 1 and 2 and successfully sold 90% of the phase 1 units.
MDMS also handled the engineering, design, construction including marketing and promotion of the Rawas inn residential project in KSA resulting to 99% of the project units being sold.
They also carried out marketing and sales for the Al-Wouroud City residential project, one of the biggest residential projects in the country. Its team composed mainly of Saudi nationals, in line with Saudi Vision 2030, who are experts in the design, engineering and construction fields. — SG
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