Sheikh Yousef Al Shelash is the chairman of three major companies: Dar Al Arkan, Saudi Home Loans, and Alkhair Capital. He first entered the real estate industry in 1994 and initiated the real estate mortgage industry in Saudi Arabia. At that time, he saw an opportunity in the market, which newly allowed real estate funds. “There was a very big business that was bubbling up, which was the real estate funds,” says Al Shelash. With his vision and experience in law, he excelled in drafting funds. “We started with small, small projects,” says Al Shelash. “The market growth definitely helped a lot, and eventually we took the real estate development company Dar Al Arkan public in 2007.”
Between the three companies under his chairmanship, Al Shelash has close to $15 billion of assets under management. Much of Yousef Al Shelash’s business and real estate success can be attributed to his education and law experience. In addition to his Master of Science in law and legal proceedings from the Institute of Public Administration in Riyadh, Saudi Arabia, and a Bachelor of Science in Shari-ah from Imam Mohammad Ibn Saud Islamic University in Saudi Arabia, he’s worked as a member of the Bureau of Investigation and Public Prosecution and acted as a legal adviser to multiple legal consultancy firms in Saudi Arabia.
Career Challenges and Evolving Regulations
Regulations were one of Sheikh Yousef Al Shelash’s main challenges. “There wasn’t a proper regulatory framework in Saudi for the home mortgages,” he explains. “When I started, regulation was just starting up. People did not understand that they could actually take a loan for 15 years, 20 years, or 25 years. And at the same time, the full mortgage loan was still not established; if you don’t pay the loan, the house is foreclosed, and you end up losing your investment. This was not there. So the main challenge was evolving with the evolution of the regulation.”
Al Shelash explains: “The culture here was that you had to save enough to have the full price of the house. Or you had to save up to buy land, and then you had to save to build a house on that land. Saudi Home Loans came in with a completely different concept. Suddenly people didn’t need to wait until they had saved the full price. This helped so many people to have their first home.” It also helped with urbanization because many people couldn’t even think about buying a house in the city, so they were living in the suburbs. Al Shelash says that Saudis flocked to the city because of the brand-new flexibility to secure home loans and mortgages.
It was a revolutionary concept at the time, but Al Shelash’s visions for the future of real estate funds laid the foundation for today’s mortgage market in Saudi Arabia. “Now, after 15 years, you have a fully developed mortgage market in Saudi,” he says. “It is similar to the United States, which has all these mortgage lenders: banks, nonbanks, Fannie Mae, and Freddie Mac. In addition, there are refinancing companies that belong to the government and are also buying mortgages to continue providing liquidity to the market, but that was not there when I started. All of that needed to evolve with regulation, and I needed to convince so many banking institutions to provide funding for these mortgages.”
Yousef Al Shelash says that “convincing the World Bank to be part of Saudi Home Loans was a very big step because once so many of the banking institutions saw the International Finance Corporation of the World Bank getting involved by financing the company to provide these loans, [it] gave a lot of trust to so many of the banking institutions. Actually, one of the first fundings came from the World Bank from the IFC. Then the other banking institutions followed.”
Yousef Al Shelash Makes His Vision a Reality
Building a better future for families has always been important to Yousef Al Shelash. He learned from watching his father. “My father was a real estate investor. He believed in real estate investing,” says Al Shelash. His father shared with him some of the title deeds that he used to trade land in what was Palestine in the 1940s. Growing up with a father who was passionate about real estate investing influenced Al Shelash. “I am there to champion families and help elevate [communities],” he says.
What sets Dar Al Arkan apart? The other listed companies have either a majority share from the government or a sizable share from the government. “We are one of the biggest real estate development companies in Saudi Arabia,” says Sheikh Yousef Al Shelash. “Today, we are doing real estate development in eight countries.”
However, his focus is still on elevating the lives of families. “There are a lot of trends based on economic classes — like in the middle economic classes, we’ve seen a shift from stand-alone houses to apartments because real estate is becoming more expensive,” explains Al Shelash. That translates into more people seeking to move from a villa into an apartment. “At the same time, utilities are becoming more expensive, and the utility bills of a villa are totally different from an apartment,” he says. “So 15 years ago, you wouldn’t see any Saudi national living in an apartment, but now there is a big trend of movement into living in apartments, which has become an acceptable way of living.”