RIYADH: Saudi-based Dar Al Arkan plans to put 319 villas up for sale before year-end after a drop in land prices and slower unit sales hurt its earnings, its top official said in remarks published yesterday.

Chief Executive Abdullatif Al Shelash said the villas are part of the property developer’s Al Tilal project which was first launched in 2003, according to Saudi newspapers Al Madina and Okaz.

The sale may yield the firm at least SR239.3m ($63.8m) in sales, equivalent to 16 percent of third quarter revenues, the newspapers said.

The company’s website pegs the minimum sale price of Al Tilal villas at SR750,000. Dar Al Arkan offers buyers the option of paying in instalments over 25 years.

The project is located in the holy city of Madina, which attracts about 5 million visitors each year.

“It has been noticed that a fair number of buyers came from outside Madina since they see in these villas ... an investment opportunity,” Shelash said.

Officials at Dar Al Arkan could not immediately be reached for comment.

The firm, which caters mainly to the middle-class market, posted a 14.4-percent drop in third-quarter net profit due to a property sector slowdown. It was its third consecutive quarterly drop in net profit.

Shares in Dar Al Arkan—which raised SR3.33bn in a December 2007 IPO that was more than three times oversubscribed—are currently trading at less than a third its listing price.

The stock has risen 6.4 percent this year, slightly underperforming the property stocks index and far below the all-share index which has risen 30.6 percent.

There are no official figures on sales of housing units in Saudi Arabia.

About 30 percent of Saudis own a home and US consultancy Clayton Holdings Inc—which is helping set up mortgage lenders in Saudi Arabia— estimated in 2009 that the kingdom has a deficit of 2 million residential units rising by 200,000 annually.