Arada bought Reem Hospital to break revenue cycle, says CEO

• $2bn to buy controlling stake
• Plans 3 more hospitals
• Aiming for sustainable revenue streams

Developer Arada, co-owned by princes of the Sharjah and Saudi Arabian royal families, has bought a majority share in Reem Hospital, an Abu Dhabi medical facility and company.

According to the developer’s CEO, it is part of a strategy to diversify from cyclical real estate sales towards sustainable recurring revenues.

The developer spent AED2 billion ($544 million) to buy a controlling stake in Reem Hospital from Bahraini private equity company Investcorp.

Arada chief Ahmed Alkhoshaibi would not disclose all terms of the deal to AGBI, but said it included the building, land, business and finance for the rollout of three more hospitals in three years.

Arada will build an additional hospital in Abu Dhabi, one in its Aljada masterplan in Sharjah and a third in Dubai.

“From a business point of view, we’re about diversification. We target different revenue streams from just build-to-sell – which we know is cyclical,” said Alkhoshaibi. “We wanted to be a more sustainable business, we want to always sustain our staff and our business, not just ride a wave and follow a pattern.”

Al Reem Hospital had revenues of AED500 million last year, according to Alkoshaibi, with EBITDA of just under AED100 million.

“We’re not looking to get our payback,” said Alkoshaibi, adding that money will be reinvested to expand the existing hospital and wider business.

The group’s financials show it is sitting on about AED3 billion of cash. Alkoshaibi declined to detail the structure of the deal, but it would be unlikely it would be without some kind of debt.

In addition to recurring revenues, the ability to build its own hospitals will drive up the value of Arada’s projects.

“When I look at a big piece of land, I can now say: I’ve got a hospital, I’ve got a school, retail, fitness, I’ve got all the anchors. That piece of land will automatically have value, whereas I got it for peanuts,” said the CEO.

Most large-scale developers in the emirates have a network of subsidiaries to control costs and timelines. Arada is no different but also has several businesses outside of the world of real estate it leverages in its masterplans.

In total, it has seven verticals, from development and asset management, to restaurants and fitness centres to in-house construction.

“If we can control certain brands, we can use them to add value to lands,” Alkoshaibi said. “For now, we’re tapped into the verticals we had planned. There isn’t a new category we’re looking at today.”

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The end goal is to create livable developments for end users rather than quick-selling units for investors.

“I would never design a building only attractive to investors,” said Alkoshaibi. “I would never design a building with small apartments. Investors love those. But when it’s finished, the person who lives there… it’s not a livable space.

“I won’t mention names, but brands get diluted over time. The majority of our customers are end users.”

According to its 2025 results published in January, Arada has launched 11 projects in the UAE since its establishment in 2017, delivering more than 10,000 homes. With a pipeline of existing and future projects in the UAE, the UK and Australia valued at AED130 billion, the company is developing approximately 55,000 units across its communities worldwide.

“Give me a piece of land, a desert and I’ll create it into a beautiful city. My anchors are my brands,” said Alkhoshaibi.