ALARGAN International has found a niche in meeting an area of high demand yet with scarce supply for the past 21 years, and is as driven as ever in providing affordable housing to the Middle East and beyond in the future.
Beginning in 1994 with just two members of staff, yet an ambition to bring this relatively untouched property development business model to its native Kuwait, the Company has adapted and evolved ever since to become one of the leading lights in the region but still feels there is work to be done if the sector is to truly flourish in the years to come.
“Affordable housing is a very important market that we need to enhance in our territory and the Middle Eastern area,” affirms ALARGAN International’s Chief Executive Officer (CEO), Khaled Al-Mashaan. “Unfortunately not much attention is given to it, so it is very important that we talk about this more often and educate people so that the competition grows.
“The more competition we have, the better products we will be able to come up with in the future, and then it is down to us to stand out in terms of quality and affordability.”
Ongoing collaboration alongside sector professionals, business developers and even universities ensures that ALARGAN plays a central role in the future prosperity of the industry; a responsible positioning indicative of the Company’s overall philosophy.
A similarly significant influence in developing Kuwait’s first Green Building Council – as well as already boasting the first LEED-approved building in the country, in the form of its headquarters – cements ALARGAN’s presence as a pioneer and leader in instilling necessary trends, and Al-Mashaan attributes this asset as the reason for the Company’s resounding success over the years.
“We use different methods and we’re an innovator,” he states. “We like to come up with ideas that will suit our end users ahead of time. We provide them with products that will make their lives more enjoyable and make sure that it goes a long way in meeting their needs.
“For every product we put out, there’s something very recognisable and people understand that it’s an ALARGAN product because of the way we implement it.”
SUCCESSFUL BUSINESS MODEL
This kind of recognition and notoriety would have perhaps been unthinkable back in 1994 when Al-Mashaan embarked on his venture; with just a theory and one colleague driving into what he knew was a potentially lucrative gap in the market.
Starting with no equity in the housing market is no simple feat, but was rectified over the subsequent years via carefully selected partnerships with individuals initially, and later with corporates and investment banks, before developing its first housing project in 1997.
“We started as a construction company, but after saving some equity, this first project was a very simple idea; to get investors to buy the land and then to build up the project of 18 individual homes with that equity,” the CEO recalls. “By 2000, we were doing more than 200 homes a year, and at that stage we realised that Kuwait would be too small, and we moved into the region.”
Starting in Oman first, the migration quickly engulfed Bahrain and Saudi Arabia also and by 2004, the Company’s capital had risen to US$75 million; later enabling the business to go public in 2007.
“To this day, we are still the same business with no need to change a very successful business model,” Al-Mashaan continues. “We have now reached delivery of more than 1,000 units a year as we expand in the GCC region.”
Never a Company to stay content with existing or former successes, the next port of call for ALARGAN’s expansion is Morocco, and Casablanca in particular.
Al-Mashaan adds: “As well as Morocco, we’re also re-evaluating Egypt after being there for five years previously without success.
“We’re very careful in our approach but are re-evaluating our position there again, while Algiers is also on our radar as a potentially lucrative market with a lot of value there for affordable housing.”
While the Company’s rise to prominence may indicate a rapid approach to expansion and continuous improvement, ALARGAN has in-fact built its model on meticulous planning and carefully-honed ideas before any dramatic step is taken, and never is this more the case than when identifying potential new regions of operation.
“While landing in any new market, we make sure to study carefully its culture and needs; we look at local partners and never enter a market alone. We cannot work without that local knowledge,” Al-Mashaan emphasises. “We structure companies to suit that partnership and then from it, we move into doing a project. We aim to build communities fulfilling the needs of local citizens and make sure to provide them quality products fitting their lifestyle.
“We come in with the technical backgrounds on housing, affordability, design and value, but we need those local partners there too.” Saudi Arabia, Oman and Bahrain have all proved to be successful ventures based on this ethos, with local suppliers, surveyors and personnel adopted in each case to complement the Company’s core property development knowhow.
REVISE AND ENHANCE
Across every operating territory, ALARGAN’s ability to standardise its quality, while tailoring its offering, has been a combination enjoyed by all partners and customers, and it is this adherence to the very latest industry trends that stands the Company in such good stead when exploring new horizons.
“It’s very important to understand your customers because they are evolving very differently today to how they were 10 or 20 years ago,” Al-Mashaan says. “You have to constantly revise and enhance your product.
“You then also have to understand the different customs and cultures, because Kuwait isn’t the same as Saudi or Bahrain, for example. We have grown to be able to cater for and understand these different cultures in the knowledge that we don’t want to overshoot or undershoot the market.”
In the future, this philosophy will certainly be applied to more territories than ever before, across the Middle East and GCC region, while a further diversification in the form of offering products in Europe will also ensure that ALARGAN’s eggs are firmly spread across numerous baskets, with potential for high yields and happy customers in each.
“We have always said we have to build something you would live in yourself,” Al-Mashaan concludes. “That is the model we have continued to enforce and is the model we make sure our people understand.
“Anything below that standard will be knocked off and started again because quality is the most important thing regardless of whether you’re building affordable homes or not.
“We provide the best product for price, and that is understood across the Company and by our customers.”