Real Estate Business Plan Template
This template is specifically prepared for real estate business plans, offering a comprehensive guide on how to launch a new business, particularly within the real estate industry. It is designed to assist in securing investment from potential investors and is compete to meet SBA loan requirements, making it ideal for new startups. Let’s now dive into creating your business plan.
Executive Summary
The Construction Industry is diversified, and demand is rising worldwide as changing trends of lifestyles among people. Construction companies deliver services that society relies on for years to come appeals. Originally born out of the necessity of population growth, housing shortages, and lack of space, the new generation of Real Estate places are overwhelmingly conceived as premium private residences for a sophisticated clientele.
Rising incomes and wealth have been, and will continue to be, associated with demand for higher standards of housing. At the same time, the availability and affordability of housing can influence the rate of household formation or average household size. The demand for luxurious housing throughout Saudi Arabia is on the increase, considering the high price tag. However, XYZ aims to provide luxury accommodations at affordable prices which we will start built-in KSA and starting from Riyadh.
XYZ is located in Saudi Arabia and registered as per the local laws and regulations of Saudia Arabia. XYZ offers cleverly designed, affordable, and luxury accommodations to the families are moving away from the traditional housing schemes. We provide modern, contemporary living crafted to uniformly high standard accommodations across Riyadh, Saudi Arabia
Vision & Mission Analysis
Vision Statement
To build luxury homes and create a well-integrated community, meticulously build with innovative design and advanced technology to enhance quality of life.
Mission Statement
Serving Saudis with unique designs of homes by ensuring accessibility and location at affordable prices.
Company Background
XYZ is redefining the concept of affordable smart luxury for the real estate investors. XYZ community is also an exceptional proposition for investors combining enduring asset values with steady projectable income streams and differentiated brand positioning. Many reasons make XYZ a winning investment.
XYZ the brand is associated with many real estate companies, a community that brings decades of construction and project management experience to complex projects.
Introduction
The Business Plan is taken very importance among the investors or Banks because it provides the investor complete information about the future activates of the Business. In Saudi Arabia Real Estate companies have built strong relations within societ. XYZ is proud of its participation in the construction industry’s running circle by entirely focusing on green, durable energy. The designed building will facilitate Real Estate communities by following demanded design, utilizing the quality material, and skilled and experienced labour.
XYZ may contain either a single-family or multifamily structure available for occupation or non-business purposes.
Residences can be classified by and how they are connected to neighboring residences and land. Different types of housing tenure can be used for the same physical type. For example, connected residences might be owned by a single entity and leased out, or owned separately with an agreement covering the relationship between units and common areas and concerns.
Luxury Apartments
A luxury apartment is a type of apartment intended to provide its occupant with higher-than-average levels of comfort, quality, and convenience.
While the term is often used to describe high-end regular apartments, or even typical apartments as a form of aspirational marketing. An authentic luxury apartment is one that is variously defined as being in the top 10% of transactions on the market or having a total value of more than $ 4–5 million US dollars, with “Ultra-luxury” apartments being valued above the US $ 10 million. However, it can also mean any apartment with extra amenities, such as a doorman, yoga studios, or Bowling alleys, among others.
Products & Services
The health of the Saudi Arabian real estate market closely influences the real estate sales sector. Industry revenue is directly linked to fluctuations in real estate prices and the volume of property transactions. As more Saudi families are increasingly attracted to luxury living spaces, including housing and apartments, architects are introducing developments with exceptional designs and amenities.
XYZ’s primary goal is to transform the real estate lifestyle in Saudi Arabia. XYZ aims to appeal to Saudis aged 25-35 who are beginning their careers and establishing their family units by offering a distinctive approach to housing.
Unique Selling Proposition
XYZ will consist of the unique and luxury design of apartments. It will provide attractive spaces and amenities in the building and fulfil all the customers’ basic requirements. The customers will acquire areas as per their living requirements that will cost affordable to them. They can purchase apartment ranges from 1-4, or they can rent out as per their affordability.
Our platform will be competitive in the market as follows:
- We have a strong network of Business and Industry Leaders
- Offering luxury and affordable apartments to the Saudis
- The experience of the Owner of 35 years
- Enduring design considerations
Pricing Structure
XYZ will earn their revenue by selling apartments. We will sell the areas according to the square meter and charge each square meter’s price. The prices will be different for small, medium and large apartments. The price schedules will be increased as per the increase of construction and real estate market.
Our pricing structure will be as follows:
| Apartment Type | Rate Per Apartment |
| Apartment One | 12,000 |
| Apartment Two | 20,000 |
| Apartment Three | 25,000 |
| Apartment Four | 30,000 |
Business Model
The rapid development of modern society and the rapid urban expansion continue to produce many Real Estate buildings, and these buildings are designed to express the latest trends, reflecting the latest scientific and technological achievements of the construction process. The people are looking for more unique structural designs, furnished apartments, easy access to local markets and quality management services, and security.
Therefore, the building designers continue to provide innovative design results along with fully-equipped amenities and services. The rise in such construction and real estate activities will create the demand for Real Estate and commercial spaces in the coming years. Therefore, XYZ aims to serve the market with the support of XYZ that brings combined services of construction and real estate management.
Location
The company is licensed under the Saudi Arabia regulatory authority. Riyadh, Saudi Arabia will be the exact location of the XYZ. We will extend our network in other cities by acquiring land and constructing luxury apartments there.
Operational Processes
The operations start from the booking of the apartment by the investor or homeowner. They can select and get quotations through the website and can consult our agent.
XYZ will run its operations as follows:
Selection of Apartment
The first step for the customers is to select an apartment as per their requirements. They can visit and check the location, floor and area. Also, they need to choose the category after analyzing the price plan.
Booking of Apartment
After finalization, the customers will be able to book an apartment by agreeing on terms and conditions with XYZ.
Site Visit
The client visit the flats and chose the flat as per his requirement than finalize the flat and negotiate the price.
Payment
The payment will be made from the customer in the register bank account of the XYZ. The customer needs to pay the amount as per schedule such as down-payment, instalment etc.
Close Deal
After negotiate on the price finalize the legal process and process to close the deal. The closing of deal is very important in Real Estate Industry because it is a very crucial part for both parties.
Land & Construction Details
Initially, XYZ will purchase land in Saudi Arabia after meeting all legal requirements. To facilitate the real estate development, a feasibility study will be conducted to ensure smooth operational management. The construction process involves multiple stages, including building design, selecting construction partners, purchasing raw materials, and completing the projects.
Construction Process
The following is the process of building a Real Estate tower:
- Design Process
- Hiring of Architecture
- Building Contractors & Permits
- Construction to Finishing Process
Completion
This stage involves the completion of all construction activities and closing the project. It will lead to the installation of luxuries and other amenities.
Development Plan
The XYZ is aiming to build unique towers that contain different Real Estate apartments. Each building will be based on 900 square meters divided into two buildings along with green areas, pavements, roads, parks etc. The following are the credentials of construction projects:
Organizational Structure
The Chief Executive Officer will oversee and manage the organizational affairs of XYZ. The organizational structure defines how specific activities are directed to meet the company’s objectives. Qualified and experienced professionals will be recruited from their respective fields, each responsible for assisting the CEO with their assigned tasks and duties. The structure will comprise senior, middle, and operational-level management.
Management Structure
The management structure of a Real Estate property company typically consists of the following key roles:
Board of Directors
Provides overall direction and governance for the company.
Sets strategic goals and policies.
Oversees the performance of the company’s management team.
Chief Executive Officer (CEO):
Leads the company and is responsible for implementing the strategies and policies set by the Board.
Manages overall operations, resources, and external relationships.
Reports to the Board of Directors.
Chief Operating Officer (COO):
Oversees day-to-day operations of the company.
Manages property management teams and ensures efficient operations of properties.
Works closely with the CEO on strategic planning and implementation.
Chief Financial Officer (CFO):
Manages the financial activities of the company, including budgeting, forecasting, and financial reporting.
Oversees accounting, tax, and financial planning departments.
Ensures compliance with financial regulations and overseas investment strategies.
Property/Asset Manager:
Manages the company’s property portfolio, ensuring properties are well-maintained and profitable.
Handles tenant relations, lease agreements, and property inspections.
Works with external vendors and contractors for property maintenance and repairs.
Leasing Manager:
Manages the leasing of Real Estate units, including marketing, tenant screening, and lease negotiations.
Ensures high occupancy rates and timely lease renewals.
Coordinates with property managers to address tenant concerns.
Maintenance Supervisor/Facilities Manager
Oversees the maintenance and repair of Real Estate properties.
Manages maintenance staff and coordinates with contractors for specialized services.
Ensures properties are in compliance with safety and health regulations.
Tenant Relations/Community Manager:
Focuses on maintaining positive relationships with tenants.
Handles tenant communications, organizes community events, and resolves disputes.
Works to enhance tenant satisfaction and retention.
Market Overview
The building construction and infrastructure activities are the most significant factor behind the selling of Real Estate apartments. The increasing urbanization trends, lack of spaces, and demand in modern designs have raised the need for such places. The availability of unique designs and luxury amenities is the significant contribution in building construction market. The market for XYZ is derived through the construction activities in Saudi Arabia.
Real Estate architectural design always expresses new ideas and practices, techniques and materials, and the development of technology and its expression pattern changes will occur over time. To get the opportunity from the construction and real estate market, XYZ aims to build apartments that provide spaces for Real Estate spaces.
Real Estate Industry
The Saudi Arabian real estate market experienced a slowdown in 2018, but transaction volumes in key cities rebounded significantly in 2019. Aligned with Vision 2030, the government set a goal to increase real estate’s contribution to the nation’s GDP to 10% by 2020, and the company is implementing several initiatives to support this effort. As part of the economic diversification strategy, the government’s focus on the real estate sector is expected to drive market growth in the coming years.
To achieve its target of increasing homeownership among Saudi nationals to 60% by 2020 and 70% by 2030, the Saudi Housing Ministry announced plans to construct approximately 25,000 housing units under the ‘Sakani’ development program. In collaboration with the Real Estate Development Fund (REDF), the Ministry launched ‘Sakani II,’ aiming to deliver 300,000 real estate products across the Kingdom in 2019. Additionally, the Kingdom introduced a rental price index to enhance transparency and regulation within the real estate sector.These initiatives are anticipated to increase the country’s homeownership rates, which may strengthen the Real Estate real estate market in Saudi Arabia.
| Annual CAGR (2016-2025) 11.95% |
Construction Market
The building construction industry in Saudi Arabia is expected to record a CAGR of 7.8% to reach SAR 196.2 billion by 2024. The Real Estate construction industry in value terms increased at a CAGR of 5.7% during 2015-2019. The commercial building construction market in value terms is expected to record a CAGR of 9.8% over the forecast period.[1]
| Annual CAGR 7.8% | Market Size SAR 196.2 |
The construction sector contributed some SR 163 billion ($ 43.5 billion) to the national economy in 2019, representing 5.5% of total GDP and 7.3% of non-oil GDP at current prices, according to data released by the General Authority for Statistics. The sector recorded a growth of 4.6% in real terms in 2019, outperforming the overall non-oil GDP growth rate of 3.3%. It represented a substantial improvement from previous years, when the sector contracted by 3.2% in 2016, 3.3% in 2017 and 3.5% in 2018.
Growth in Real Estate Homes
Despite the current slowdown in the country’s real estate market, the demand for lower and middle-income housing remained strong in Riyadh, Jeddah, and DMA (Dammam Metropolitan Area), in 2019. In Jeddah, the current housing supply is focused mostly on middle-income housing, with most of the new housing developments happening in the north and the east of Jeddah. Real Estate developments in Al Khobar are mainly taking place in The Al Khamra and Al Aziziyah districts, as the central areas have limited availability of Real Estate land, following many years of intense development activity.
Consumers Price Index
The total populathttps://tradingeconomics.com/saudi-arabia/populationion in Saudi Arabia was estimated at 34.2 million people in 2019. Saudi Arabia’s population represents 0.41 percent of the world´s total population which arguably means that one person in every 248 people on the planet is a resident of Saudi Arabia.[1]
Target Market
The real estate industry covers many aspects of land, including the development, valuation, marketing, sale, leasing, and maintenance of commercial, manufacturing, Real Estate, and agricultural properties. Depending on the national and local markets, this sector will fluctuate, but it is relatively stable because people often need homes and always need office space.
Narrowing down the market is a market gas for luxury and affordable homes that will give an advantage to XYZ to fill. With the support of XYZ, XYZ can create a good customer base and get significant market share in Riyadh, SauOnline Marketing
Online marketing serves to provide information about the brand to potential customers through web-based mediums and channels. There are certain mediums, including email, social media, SEO (search engine optimization), display advertising, Google AD-words, etc. that are mainly used for online marketing.
The core purpose behind online marketing is to attract and gather customers through those mediums and channels where they spend their time performing certain activities, including socializing, searching, and shopping.
The online marketing strategy for our business will have the following mediums:
Social Media Marketing
In digitalization, social media has become the most efficient channel for personal and business communications. It has revolutionized the way brands maintain their relationship with the audience.
Offline Marketing
In addition to modern marketing medium, it is also vital to use old-school methods that still work wonders even in digitalization. The following channels are considered as an effective marketing strategy for the company.
Flyers/Brochure
Flyers are a traditional yet effective medium to promote the business locally. The company plans to circulate flyers and brochures in cafes, clubs, and gyms to get customer engagement.
Competitive Analysis
Key Market Players
The following are our direct competitors of XYZ:
Zaron
ZARON Properties has been shaping the Middle East’s luxury real estate market since 2002, delivering iconic Real Estate, commercial and leisure properties across the region and beyond. ZARON adds vibrancy to the cities where its projects are located, with a vast and diverse portfolio that includes two world-class master-planned golf developments. To date, ZARON has delivered 30,900+ quality homes, with 34,000 more underway.
Eisa
Based in Riyadh (KSA), Eisa is a public shareholding company listed on the Saudi Stock Exchange (Tadawul). With SR 10.8 billion in the capital and SR26 billion in assets, we are one of the leading real estate companies in the Middle East. Since 1994, Eisa has had a significant influence on the real estate development sector in Saudi Arabia. The company has invested in innovative Real Estate solutions, which resulted in 15,000 housing units and 500,000 sq.m of luxury retail space.
SWOT Analysis
Strength
• Owners multiple years of experience in the real estate industry
• Launching projects in Riyadh to target homeowners and investors
• Improving lifestyle of communities by providing luxury Real Estate apartments at affordable prices
Weakness
• Ensuring the quality of services will require us to establish an audit and quality control department
• Currently, we lack agility and speed in entering new markets
• Fulfilment of all legal requirements in the Saudi Arabia
Objective
• Rising demand for luxury apartments with all amenities
• The growth in population for Real Estate places
• Main competitors are not geared to build speed & efficiencies
Strength
• Government and legislative policies related to Real Estate properties
• New entrants offering quality services of interior designing
• Macro-Economic headwinds can slow down the overall growth of the network
Start-up Expense Analysis
Financial Plan
Based on the nature of the industry, the Financial Statements have been projected for three years. These projections have been formed based on assumptions, which are explained incoming parts of this report
Projected Financials
Income Statement
Balance Sheet
Cash Flow Statement
Payroll Expenses
Common Financial Ratios
Conclusion
The real estate market is one of the most globally recognized industries, comprising four key sub-sectors: lodging, retail, hospitality, and real estate. The growth of this sector is closely linked to the expansion of the business world and the rising demand for urban and semi-urban housing.
In Saudi Arabia, demand for real estate properties continues to rise, particularly for luxury units, driven by investors and evolving investment patterns in the market. The Saudi government and the Ministry of Housing support citizens in owning homes by offering credit lines and housing loans. XYZ will be established in Saudi Arabia, registered according to local laws and regulations. Its primary focus is to provide well-designed, affordable, and luxury apartments for families in Riyadh. XYZ’s target market consists of individuals aged 25-35 who are beginning their careers and seeking family homes. The company will construct apartments in close proximity to workplaces, with the support of XYZ.
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