Saudi deal for Old Mutual unit
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Old Mutual Properties clinched a deal on Friday to start a property service company, United Properties, to manage four shopping centres for the Savola Group, a Saudi Arabian industrial company.
Old Mutual Properties` departing MD Ian Watt declined to give a figure for the deal, but said it was the largest offshore agreement the group had concluded and could see it manage up to 15 centres in Saudi Arabia.
The deal with Savola has opened up a lucrative revenue stream for the South African group as the Saudi company was developing eight properties worth R5bn.
Watt said the economy of Saudi Arabia was set to boom. With more than 72% of the Saudi population of 23-million younger than 30, the demographics of the country supported the growth of the consumer and property market. More than 10% of groceries bought in the kingdom were sold through Savola`s stores.
Ignatius Kruger, a senior Old Mutual Properties executive, has been appointed to start up United Properties. Watt was not particularly concerned about Old Mutual Properties having problems adapting to the Saudi culture.
Business Day
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