Dar Global builds war chest for acquisitions

• Distressed assets and land on the table
• Borrows $151m from parent company
• Has $230m available in free cash

Dar Global, the international arm of Saudi Arabia’s Dar Al Arkan, has borrowed millions of dollars from its Saudi parent this year and says it is ready to buy distressed assets, as cash from homebuyers has slowed sharply.

The London-listed developer published half-year results last week. They show a business leaning on its majority shareholder to fund growth after the US-Iran war hit Gulf property sales.

Dar Global drew $151 million from a shareholder loan in the six months to June 30, compared with $36 million a year earlier. Its debt to Dar Al Arkan rose by half to $428 million. The filing states that just over $40 million of the $490 million facility is untouched.

The company did not say how it would use the shareholder funds but its shares are up 5 percent this year.

However, with roughly $230 million in free cash, the company said it could pursue “opportunistic initiatives”. These include buying distressed assets, land and refurbishment projects across its markets.

Chief executive Ziad El Chaar told AGBI in July that the company was looking at acquiring distressed residential developments in prime central London, specifically areas such as Mayfair, Belgravia and Knightsbridge. Higher refinancing costs, debt repayments and failed completions have left some local UK developers and secondary market investors under pressure, weighing on property values.

Revenue rose by two-thirds to $258 million and profit more than doubled to $30 million. But buyer cash slowed. The company booked profit on homes it had already sold, while fresh deposits slowed to a trickle.

Nearly three-quarters of its $850 million cash pile sits in escrow, which releases funds only as construction hits set milestones.

In January, weeks before the US-Iran war started, Dar Global launched two Trump-branded Saudi projects. Saudi Arabia’s home sales then halved to 29,000 in the first quarter, AGBI reported in May. March sales, the first full month of war, fell 62 percent year on year.

Further reading:

• War upends Saudi real estate push
• Dar Global CEO: Off-plan sales model on borrowed time
• Dar Global: UK property laws ‘cannot change with every PM’

El Chaar told AGBI in August that the company had paid contractors in advance to keep sites running. Advances and deposits on its books rose by nearly a quarter in the half.

He also said developers would need “a stronger balance sheet” as the Gulf’s off-plan model shifts towards European-style payments tied to construction.

The board said it would preserve liquidity and phase launches with market conditions. It gave no profit guidance for the year.

“At times of uncertainty, people will wait, will delay, but they will not cancel,” El Chaar said.