Dubai:
Deyaar will next week launch apartment sales for the first phase of its Dh3 billion plus ‘Midtown’ project at the IMPZ (International Media Production Zone) master-development off Shaikh Mohammad Bin Zayed Road. This represents the first launch by a Dubai based developer post-summer and will be a key indicator of investor sentiments in what is seen as a soft market.
The first phase of Midtown — named ‘Afnan District’ — will feature seven buildings. While no official confirmation of the pricing was revealed, it is believed the units will be offered at under Dh1,000 a square foot, seen as crucial to entice end-user interest in off-plan launches now. The developer did confirm that different payment structures will be made available, including those that can be made post-completion.
The overall project is to feature six phases, including retail and hospitality, with construction starting in Q4-2015 and to be ready before 2020. The location allows access by car to Al Maktoum International Airport and the Expo 2020 venue in 10 minutes or so.
Incidentally, Deyaar had first revealed Midtown at the Cityscape event last year. On whether it wouldn’t have been better to bring forward the launch much earlier, Saeed Al Qatami, CEO of Deyaar, said: “Even at the end of last year, the market was giving signs that it was turning soft. But the state of the market at any moment does not frighten us.
“It would have been great if we could have launched sales earlier and thus be able to recognise revenues and profits early into the project’s development cycle.
“But what we have learnt from the past six to seven years is you have to do the due diligence and all the other things supposed to go along with it. That’s the way developers get to add value, not just for themselves but for buyers as well.
“In the last 10-12 months, we have been working with all the project and design consultants on the best way to do things for Midtown. We are now ready to go ahead with it.” (The CEO declined to go into the specifics of funding the expected Dh3 billion plus development bill.)
Deyaar’s intention is to offer a certain percentage of the residential component on sales and retain the rest to generate future leasing income. “For our future projects, we could consider an equal split between sales and leased properties. And even a 30:70 split, with 30 per cent for sales. This way, two or three years down the road, we can have better ratios on our financials.”
Dubai’s leading developers have been relatively quick to cotton on to the wisdom of not being overly dependent on sales-led revenues. Talk of an increased contribution from ‘recurring income’ is a constant now, with the likes of Emaar and Nakheel already making quite some headway on this score.
For Deyaar, generating higher leasing income will also sit well with the already extensive property management portfolio — 20,000 units across the UAE on behalf of clients — that it operates now.
“Real estate is not about just selling — if handled well, maintenance and leasing can have such influence on recurring income,” said Al Qatami.
