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Bin Laden Firm Aims To Build Whole Cities
By Sebastian Tong
SINGAPORE, Aug 28, 2007 – Real estate firm Middle East Development LLC is securing massive tracts of land in Yemen, Djibouti and Syria to build whole cities from scratch.
The Dubai-based privately held group, controlled by a key member of Saudi Arabia's bin Laden family, wants to expand beyond residential and commercial real estate into the business of planning and building large-scale cities from the ground up.
"There is a great need for large developments with the infrastructure to accommodate rapid economic and population growth," Oussama Al-Dimashki, the chief executive officer of Middle East Development, told Reuters in an interview on Tuesday.
Economic development in the oil-rich Middle East and countries such as China and India is straining existing cities that were not planned for such large populations, he said.
"The future will be the franchising of cities. Whole cities that are run by private corporations and businesses rather than governments and bureaucracies," he said.
The group, controlled by Tarek Mohammed bin Laden -- a half-brother of al Qaeda leader Osama -- is securing 1,500 square kilometers of land in Yemen and about 600 square kilometers in Djibouti to develop two planned cities.
The two cities would eventually be connected by a 27-km long bridge linking the African and Asian continents.
"When you talk about putting in the infrastructure, the airports, the highways, the sewage systems -- besides the residential and commercial developments -- you're talking about hundreds of billions of dollars," said Syrian-born Oussama.
The group, established in 2004, is also in talks for projects in Syria, Tunisia and Morocco.
Oussama said the reputation of Middle East Development founder Tarek Mohammed, who heads the Saudi BinLaden Group, would help the company acquire land on favorable terms.
Large sites would be developed and eventually divided up into smaller plots of land to be parceled out to other investors.
"In the Middle East, most cities started out as ancient port cities and grew big without proper planning," said the former economics professor.
OUT OF DUBAI
The company, which currently has assets under management of around $280 million mostly in Bahrain and Dubai, has begun to look outside of the Middle East and North Africa for growth.
"Our focus is to go out of Dubai because we think that Dubai is becoming less profitable. I think there are much more profitable opportunities that exist in the bigger Middle East," said Oussama, noting that Dubai-based property firms such as Emaar Properties are stepping up overseas investments.
Middle East Development is in talks with a Singapore developer to build a commercial and residential complex in a second-tier city in China and is also studying a proposal to invest in an office and retail project in Bangkok.
Oussama said the group's 38-percent held Singapore-listed subsidiary Middle East Development Singapore is likely to be involved in the China project, which would be the Dubai parent's first foray into Asia.
The Singapore firm, which on Tuesday reported $7.8 million revenue for the financial year 2007 on its primary waterproofing and construction supplies business, will also branch out into project management and property development, he said.