(MENAFN- The Arabian Post) Arabian Post Staff -Dubai

Arada has acquired a 75 percent stake in London-based residential developer Regal as part of a Dhs 2.5 billion investment that marks its first UK foray and second international expansion after Australia. The UK business will be rebranded as Arada London, with an ambition to turbocharge Regal's pipeline from 10,000 units across 11 projects to over 30,000 within three years.

The acquisition was formalised in a ceremony attended by Sheikh Sultan bin Ahmed bin Sultan Al Qasimi, Chairman of Arada. Arada's Group CEO, Ahmed Alkhoshaibi, said that more than half of the capital will be channelled into accelerating development and securing new land parcels. He described the London market environment as one presenting“right opportunities to acquire the right sites at the right price”.

Regal's chief executive, Jonathan Seal, and the existing executive team will remain in post after the transaction. Seal remarked that Arada's alignment with Regal's strategic values and long-term vision made it a fitting partner to lead the next phase of growth.

The deal gives Arada an immediate platform in London, tapping into Regal's diversified portfolio, which spans for-sale residential units, purpose-built student accommodation, and mixed-use regeneration schemes. Among ongoing developments is the Fulton & Fifth project in Wembley, comprising 876 homes of which 40 percent are designated as affordable housing, and Orchard Wharf in Tower Hamlets, which recently secured approval for 1,365 student beds and 200 homes.

Analysts see strategic logic in entering London via acquisition rather than greenfield development, citing the complexities and regulatory friction in the UK housing sector. Arada's move follows a wave of Gulf-based developers expanding into London, including Damac, Aldar, and Modon, often via partnerships or subsidiaries.

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However, entering the London residential market is not without risk. Regal's 2024 accounts showed £252 million in short-term debt, contrasted against £196 million of investment property, reflecting potential balance-sheet stress. The UK housing sector continues to face headwinds from construction inflation, planning delays, and demand volatility.

Arada has defended the timing. Alkhoshaibi stated that entering markets when sentiment is subdued allows for acquiring desirable assets at lower cost, positioning for upside when conditions recover. He noted that Arada's approach is to maintain momentum in its UAE operations while layering growth abroad.

Beyond the UK, Arada is also contemplating further regional expansion. The company is reportedly in discussions with Saudi Arabia's Public Investment Fund about a large mixed-use project in the kingdom. In the UAE itself, Arada plans a Dhs 3 billion development project in Ras Al Khaimah next year, reinforcing its domestic footprint.

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