Established in 2000 when the entire property market was liberalised, Nakheel has come a long way to becoming one of the leading developers in the region, with a strong customer base, particularly in foreign markets such as India. To date, it has sold about 4,500 properties worth of $2.5 billion (Dh9.18 billion), with 11-12 per cent of its current customer base from India.
The company’s CEO, Sanjay Manchanda, talks to PW about the company’s new and ongoing projects and strategy to attract Indian investors.
Tell us about your marketing efforts in India.
At the moment, we have properties across the spectrum, starting from $145,000 to almost $1.1 million. For example, a one-bedroom apartment in International City comes for around $145,000, which is roughly about 9.3 million Indian rupees at current exchange rates.
We also have three- and four-bedroom ready-to-move-in villas at Al Furjan for 50 million rupees. It is a very new residential community we are building within the World Expo 2020 hinterland.
We also have The Palm Tower, a 52-storey building on the Palm Jumeirah which has one-, two- and three-bedroom units, and prices start from almost $500,000.
There are many developers looking to attract Indian investors. What’s the unique selling point of your projects?
I think it comes as an entire package — location, quality, budget and credibility. Real estate is all about location. Not only have we selected good locations, but also have kept an eye on the quality of projects. People want to buy from credible developers who will deliver.
How are you helping the buyers obtain finance?
We have extended a helping hand by deferring the payment plans. Earlier we used to insist on paying over one year, but now we can look at two years, even three years, depending upon the scheme, market and demand.
In some of our ready-to-move-in projects, customers can pay over three years, which means you can sign a contract, make whatever payments under the plan, and start living. As you are utilising the unit, you’re still continuing to pay. So that is something which we are already offering.
We also have very successful tie-ups with financial institutions — some are formal and some informal. Also, accessibility to finance is relatively easier now, and the lending rates seem to be very competitive. So when you have all these, people are encouraged to buy.
Tell us about your Warsan Village project. What are you doing to attract Indian investors?
It’s location is good on an arterial road. It is next to a very well-developed community, International City, and we’ve added certain elements and continuing to add elements around that area. We’ve done what we call a souq or bazaar or a community centre there. We are improving the usage of land around it by developing more retail space. We have just doubled the capacity of Dragon Mart and added a cinema. We’ve added entertainment which was not there.
What’s your business strategy keeping the current market in mind?
Our strategy is to continue doing what we’re good at, but at the same time developing other verticals of the business. It’s not that we don’t have any off-plan projects. We do have off-plan projects such as Palm 360, and there is another project which will be coming very soon and others in the pipeline. But, yes, we are very receptive to what is happening in the market and that’s very important for any company.
We would continue to develop our cash-generating assets, which we have already doubled now, and improve on that. We never had hotels previously, but we are now on target to build almost 6,000 rooms, of which almost 660 are in operation. We’ve already started construction of our 800-room resort. A 550-room resort will soon start. So we’re moving in all directions.
You seem to have lately adopted a conservative approach when launching new projects.
I won’t say conservative. We have a couple of off-plan projects like The Palm Tower. We also have Palm 360, which is targeted at a very high end of the market. What we are seeing in the Dubai market today is that a lot of launches are happening in the $0.5 million to $2 million space. We already have some ready products for that. And, then again, it also depends on where our land bank is. I can’t do a $0.5 million per unit on a project on a seafront; people will say, this is not right.
Will you be launching any new off-plan project soon?
We’re on course to bring off-plan projects to the market. I cannot give any timelines. It has to be considered in line with what we see in the market, what we believe is our priority in the overall resource allocation, and how we go about delivering what we have committed to our shareholders and stakeholders. The timing will be determined partly with where we are in our overall strategy and partly by the market.
Any advice to investors as the World Expo 2020 draws near?
To be honest, you cannot give anybody any advice unless you know the investors’ criteria. I read between the lines when people say that everything is going to stop after 2020; it’s not going to happen like that. If you look at the economic indicators, they are all seeing growth — whether it is population, number of businesses opening, size of the infrastructure, travel and trade. The UAE’s GDP is growing at about 3-3.5 per cent. So in that scenario, you will always have demand coming through.
Tell us about Palm 360.
We announced Palm 360 some time back, but we are going to do some fine-tuning on the project. We have not even started sales. We will be announcing the date of sales, which will happen next year.
Give us an update on the Deira Island project.
Deira Island is moving nicely. The first phase of infrastructure work has been completed. Now we are looking to commence the second phase of infrastructure work. We have put the night market on the advanced stages of the construction. Work has started on the 800-room resort, and the 600-room beachfront resort. We have announced the award of a construction contract for the mall. So we are moving on Deira Island as planned.
What is the plan for the Palm Jebel Ali? When do you plan to bring it to the market?
For Palm Jebel Ali, the plan is the same that we will bring it to the market when we believe the market is appropriate to absorb that kind of inventory. The reclamation is done. We review our projects regularly in conjunction with the market and then we make certain decisions based on that.