Arriyadh Development Company (Ardco) has performed strongly across its business lines during the global crisis. Its developments – Attameer Centre aside – have not been materially hit by declines in lease rates.

Ardco has performed strongly across its business lines during the global crisis. Its developments – Attameer Centre aside – have not been materially hit by declines in lease rates.

Profitability has been solid, with a healthy 17 per cent increase in net income to SR93m in 2009, underpinned by an 11 per cent increase in revenues. This follows a 12.8 per cent increase in profits in 2008. The company’s net profit margin has also been maintained at between 55-58 per cent over recent years.

There will be some challenges to meet. While demand for office space from the public and private sectors has increased over the first half of 2010, new supply is outstripping demand. In the office sector, despite increased demand from both private and public sectors, the market continues to move in the favour of tenants with vacancies increasing and average rentals declining over the first half of 2010. The retail sector, however, is expected to see improvements in both sales and rents over the remainder of 2010. 

Not all of Ardco’s projects have proved successes. Despite full occupancy levels at its Attameer Centre in 2009, lease rates declined amid indications of tepid tenant interest in the indoor areas of the development. The developer is likely to emerge as one of the kingdom’s biggest project sponsors in future years, with the Duhaira scheme – at the heart of Riyadh city centre – set to transform the capital’s skyline. Ardco’s profile is likely to increase in tandem with a city that now exceeds 5 million inhabitants and is growing by 3 per cent a year.