Established in 2002, Deyaar has grown into a diversified company offering a range of services covering real estate development and facilities management. The Dubai Financial Market-listed company recently announced forming a strategic alliance with Dubai South for a joint development of a mixed-use project within the Residential District. PW caught up with Saeed Al Qatami, CEO, Deyaar Development, to get up to speed with the company’s development strategy and new projects.
Talk us through some of your key on-going projects? Do you plan to launch more this year?
In January, we announced a 50-50 joint venture with Dubai South, called the Residential District, to develop a 1.27 million square-feet site into a mixed use project comprising residential property, retail and hospitality facilities. Dubai South is part of the emerging urban landscape of the UAE. Located beside the World Expo 2020 site and Al Maktoum International Airport, the project is set to become a lively, connected community that reaches across the business, entertainment, tourism and family segments.
This year, we will take to the market two more key developments — Mont Rose, two residential towers and a hotel apartment in Al Barsha South, which is on track to be handed over by mid-year; and The Atria, a 32-storey residential tower and a luxury serviced apartment tower in Business Bay, which will be handed over by the end of the year.
In Midtown, located in Dubai Production City, we are planning to launch two new phases following the success of Afnan District and Dania District. Midtown now spans a built-up area of 4.8 million sq ft, with 13 residential developments offering luxury apartments in an integrated urban community.
We are responding to demand for residential accommodation in the UAE, with more than 4,700 units built and over 4,200 under construction. The UAE’s population is rapidly growing, especially in urban areas, and the demand for hospitality is rising as the government intensifies efforts to draw more business and leisure tourists, while preparing to host the World Expo.
At a time when many projects are getting delayed due to challenging market conditions, how do you strategise your project launches and execution to deliver on time?
At Deyaar, we believe we are unrivalled when it comes to knowing the market and knowing our customers. With more than 15 years’ experience, we understand market dynamics and our products are tailored for our loyal customers. We offer value to customers on product, design, service, location and market insight. Our development projects, whether residential, commercial or hospitality, are always carefully weighed against market demand. So, we know the UAE is undergoing rapid population and tourism growth and these drivers create demand for quality residential and hospitality projects.
We know, too, that facilities management and property management are fast-growing business segments as clients outsource work to get the right expertise. Our portfolio is diversified because we want to offer customers an end-to-end, value-based, complete real estate experience.
That helps to differentiate us in the market. It is what is helping us to scale, as we adapt our business model for what the market wants.
You had recently announced offering a guaranteed 14 per cent return over two years for units at The Atria in Business Bay. In a sluggish market, are you confident about offering these returns?
When completed later this year, The Atria will be a 32-storey residential tower and a luxury serviced apartment tower. Deyaar released 50 per cent of the serviced apartments to the market and kept the other half for ourselves. Our retention of 50 per cent ownership for recurring revenue generation is based on our confidence that this product will make a strong return on investment.
The Atria, located in Business Bay’s busy urban hub, will overlook the Dubai Water Canal. The recurring revenues we will generate from our ownership of the units, as well as the revenue raised by selling the other half to investors, demonstrate a sound business strategy and confidence in the market.
What is your expansion strategy for the next three years?
We are planning to grow across the business to attract the interest of global investors in our development projects. New projects are due to come on stream shortly, including Dubai South, Mont Rose, The Atria and hotel and serviced apartments in Al Barsha.
Among our key focus areas will be the retention of ownership of developments, such as the Millennium & Copthorne-operated hotel in Al Barsha and a 50 per cent stake in The Atria, so that we can generate recurring revenues for our business.
Similarly, in the residential segment, we have 4,200 units under construction as the population continues to increase.
Are you planning to launch more hotels?
There is no doubt that hospitality will be a major growth driver for the UAE and for Deyaar, especially with Expo 2020. By then, Dubai will have 20 million visitors, owing to the government’s tourism plans. Dubai Tourism expects occupancy rates to stay at around 77 per cent until next year. By the end of 2018, Dubai will have 134,000 hotel rooms. Deyaar is helping to meet rising demand for hotel and serviced-apartment accommodation by providing quality facilities across key growth corridors in Dubai.
As part of our mixed-use developments, we will provide over 1 million sq ft of hospitality facilities.
You cater to a wider spectrum by offering mid-segment properties, both in the residential and hospitality sectors. Would you continue that strategy?
Deyaar has developed 7 million sq ft of real estate in the UAE. We have 7 million sq ft more under development. In the residential market, we are seeing increased demand for high-quality, affordable housing and apartments. More young professionals are entering the market all the time. As the World Expo approaches, this trend will continue. The real-estate sector will need to continue adjusting to consumer and demographic trends. What must remain constant, though, is a commitment to the highest quality standards.
So, our strong performance is based on the quality of what we sell, as well as our knowledge of what the market is seeking. We will continue to offer a well-diversified product and services portfolio to the market.
