South African property services group Gensec Property Services will hold a 45% stake in a new company in Saudi Arabia.

Gensec announced this week that it had signed a partnership agreement with Saudi Arabian property services group worth about R13bn, Arabian Services Group (ASG).

Gensec Property Services CEO Marna van der Walt said on Tuesday the R5m deal would probably see the creation of a new com-pany, which has yet to be named.

In terms of the deal, Gensec would hold a 45% share in the new company and ASG would hold a 55% interest.

All of ASG's existing property management, leasing business and facilities management businesses would be transferred to the new company. Gensec would also open an office in Riyadh, Saudi Arabia.

Van der Walt said ASG had approached Gensec saying it needed Gensec's "backbone and support to help them grow their portfolio and enhance their service delivery".

ASG's annual turnover is about R10m. Van der Walt said Gensec saw Saudi Arabia as a "growth node into the future" and that it offered much opportunity.

"We are entering the market from a relatively low cost base and we can deliver sophisticated services. It makes us a specialist value-adding service provider," she said.

Other companies such as Old Mutual are already active in the Middle East. Several other property companies are looking to broker deals in the region.

"There is plenty of cash in the Middle East to do property investments and it is not as reliant on financing (as in Africa) to do property projects. The property ownership is widely spread in individual hands and there is not a big concentration among certain groups," she said.

Gensec has started branching out into other parts of Africa and has opened offices in Namibia and Zambia.

Business Day
Publisher: I-Net Bridge
Source: I-Net Bridge