By Jonathan Prynn

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A major Gulf property developer today made a dramatic entry into the struggling London housebuilding market as it pledged to build 30,000 homes in the capital.

UAE based Arada snapped up a 75% stake in London housebuilder Regal London in a £500 million deal that will make it one of London’s biggest residential developers.

Regal, founded in 1998 by Paul Eden and Simon De Friend, currently has a pipeline of 10,000 flats and houses due to be delivered by the end of the decade, but Arada said it planned to treble this figure within the next three years.

Arada, which was founded in 2017 in the emirate of Sharjah, has as a war chest of £270 million for land acquisitions. It is spending a further £230 million on buying the stake in Regal and supporting its existing developments.

The deal comes when housebuilding activity has collapsed to its lowest level in decades as developers struggle with soaring construction costs, stagnant prices, planning delays and a huge backlog of fire safety approvals.

Chief executive Ahmed Alkhoshaibi said: “We like to enter markets when they are at a low point, it is a good time to acquire land banks. We started in the UAE when the property market was down and we went into Australia when that market was down. It is exactly the same with London. There will be some distressed sites. It is all about entering at the right price.”

He said the inflation in construction costs was a global issue challenge for developers that it could offset through centralised procurement from the UAE that would help secure the best pricing.

It is the second big move on a London based housebuilder by a UAE developer in recent years. London Square was bought by Abu Dhabi based Aldar in December 2023 for £230 million and since become one of the capital’s most active residential developers.

Regal , which will become Arada London, currently has a pipeline of 10,000 homes over eleven projects, including residential for sale, purpose-built student accommodation and a town centre regeneration scheme in North Finchley.

Projects under construction include Fulton & Fifth in Wembley, a mixed-use residential-led development delivering 876 homes, 40% of which will be affordable.

This includes the recently approved Orchard Wharf in Tower Hamlets, which will deliver 1,365 student accommodation beds and 200 affordable homes.

It is the second big move on a London based housebuilder by a UAE developer in recent years. London Square was bought by Abu Dhabi based Aldar in December 2023 for £230 million and since become one of the capital’s most active residential developers.

Sheikh Sultan bin Ahmed Al Qasimi, chairman of Arada and deputy ruler of Sharjah, said: “London is one of the world’s leading cities, and our expansion into this market represents a strategic step for Arada in response to the strong demand for residential space.

“This investment provides a significant opportunity to accelerate the delivery of new residential assets in London, fully aligned with Arada’s long-term strategy to develop high-quality projects that enable people to live healthier and more prosperous lives.”

Over its eight-year history, Arada has launched 10 projects across the UAE. It entered the Australian market last year and has nine developments totalling 5,000 units across New South Wales.

Arada’s projects across both the UAE and Australia are valued at more than £19 billion, with a total 42,000 units, of which more than10,000 have already delivered.

Jonathan Seal, chief executive of Regal, added: “ With nearly 30 years of successful partnerships behind us, Regal has built a reputation for aligning with businesses that share our long-term vision and deep understanding of the real estate industry.

“It is in this spirit that we have carefully chosen Arada as our partner, a business that shares our values and confidence in the London residential market and our management team’s ambition to continue growing market share and shaping the London skyline.”