Dubai's Arabtec Holding said on Thursday it had won a SR2 billion ($544.7 million) contract to build Lamar Towers in Jeddah. The deal is the latest for Arabtec in Saudi Arabia after starting work on a university project in Riyadh as it looks to diversify away from its home market in Dubai. The contract, awarded by Zahran Real Estate Co and Cayan Investment & Development Co, will take 36 months to complete, the UAE's largest contractor by market value said in a statement on the bourse website. The project, which consists of two towers, will start immediately and will take three years to complete, Arabtec, the UAE's biggest construction company, said in a statement on Thursday. UAE construction firms have stepped up efforts to move into new markets as the domestic real estate market - especially in Dubai - has come to a standstill in the economic downturn. The world's top oil exporter Saudi Arabia, Kuwait, Qatar and North Africa are seen as the cure for the malady at home. Arabtec in March announced a foray into Saudi Arabia. Lamar Towers is its second project in the Kingdom, having previously struck a SR1.5 billion deal to build a university in Riyadh. Lamar Towers is a luxury high-rise project, consisting of two towers of 68 and 60 floors, comprising residential and commercial space and a shopping mall. “Arabtec is actively bidding for projects in the MENA region to strengthen its backlog and improve profitability in the long term,” said Mala Pancholia, an analyst at Al Mal Capital. Pancholia said Arabtec's backlog outside the UAE (excluding Russia) has more than doubled to 25 percent in the past four months, adding that the company “expects to win more (Saudi) contracts in the near term. “Not only does this enhance the future to top-line growth prospects, we also believe that geographic diversification and expansion will help relieve the possible balance sheet stress in the long term.” Pancholia estimates Arabtec's Saudi business could add around SR5 billion to its revenue in the next two to three years. Arabtec's first-quarter profit fell 30 percent, reflecting faltering market condition. The company said in May it had seen its order book slashed by nearly a quarter, or AED9 billion ($2.45 billion), to 30 billion, and planned to aggressively expand abroad. Libya and Algeria are also on Arabtec's radar. Dubai-based Al Habtoor Leighton Group is also seeking building contracts in Kuwait and North Africa . Its managing director said recently the firm was primarily seeking large infrastructure work in Kuwait. __
