Dubai: Announce a project and then immediately get on with the sales campaign — for Dubai’s developers, this was the way to do business. Not any longer. These days, the chances are they will be biding their time before start on the business of selling.
And with a sound reason too. “It’s our belief as investor-developers that customers are hesitant to buy sand,” said Jayant Ganwani, CEO of Lals Group and an equal investor with the Regal Group in Signature Developers. “They want to be able to see something at a rather advanced stage before they put money into a project.”
Signature is currently helming two projects, the ultra-luxury 118 Downtown — with an apartment to a floor and soon heading for handover — and a mixed-use high-rise at JLT, also fairly advanced on the construction side. The latter will feature a hotel that will be managed by India’s hospitality group Taj. The two projects entail a development cost of $500 million plus (Dh1.8 billion).
There are also residences at the ground plus 45-storey structure — the developer is now deciding when to start sales. “We are now at 30-40 per cent construction on the development … but haven’t sold anything,” said Ganwani. “We want to give people the comfort they are buying into something that would finish to specification and on time.
“From that point of view, our sales would probably start within the next fortnight. We are way beyond the minimum required to start marketing it, without any sort of guarantees, etc” (As things stand now, the project is to be handed over in the fourth quarter of 2018. The first 19 floors are dedicated for the hotel and its 201 rooms.) And launching sales later comes with certain inherent advantages. “If you sell anything at a ground level, you need to discount yourself to give people the assurance that it is going to get built,” said Ganwani. “But once up in the sky, people are more comfortable on what a fair price is.”
Elastic approach
Progress on the construction side is now integral to convincing buyers, particularly among end users. They are less likely to think favourably if Dubai’s developers continue to maintain an elastic approach to meeting project timelines. Especially for those buyers who need to raise more than 50 per cent on the mortgage side. (As per Central Bank regulations, banks are only allowed up to 50 per cent exposure on off-plan projects.) “We are probably running ahead of schedule on construction, which is managed by Al Shafar General Contracting,” said Ganwani. “We have already set the prices — there are only 80 units and since the inventory is small, a product like this also has to sell by word of mouth as well as through brokers.”
The prices on a two-bedroom start at Dh1,500 a square foot, while the three-bedrooms are in the Dh1,650 range and with the front facing Shaikh Zayed Road, the Montgomerie golf course and Dubai Marina on the other side of the road.
“We have signed up multiple brokers,” he added. “Doing it with only one brokerage with access to one particular kind of clientele may be prejudicial to creating a community.”
The project was earlier branded as a Vivanta, which is the five-star branding within the Taj portfolio. It was later decided to go with the mother brand itself — “There has been a mindset change at the hospitality group and they agreed on using the Taj name.”
The 118 gets past the finish line
One of the most upscale of high-rise projects in Dubai, the 118 Downtown — with prices at Dh4,000 a square foot and featuring only 28 apartments- is to start handover after Eid. It was on April 30 that the project, located near The Dubai Mall, finished construction.
“We sold in excess of 40 per cent during the construction process,” said Vikram Shroff of the Regal Group and an investor in Signature Developers. “We wanted to finish before getting started on the rest of the sales.
“We see the 118 selling along the lines of any prime property in New York or London, where the rest of the properties are sold after the building is lived in. This we expect to start right after August ... and we don’t want to sell units in one go.”
But Dubai currently has a surfeit of new super-premium projects trying to gain buyer attention. Could it mean a longer sales period for the 118?
“Those who want to live in a building where they are the only occupant on a floor and want that to be in the Downtown, they will come to seek us out. There are always buyer for that level of privacy.”
