Want to make it big in Dubai's booming real estate market? Then pay attention as the city's new hotshot developers open up to us.
The construction industry in the Middle East is hotter than the sands on which it is built. The world can only watch gobsmacked as the region rewrites the rules, defying skeptics and naysayers. Nowhere is the boomtown rush more evident than in Dubai, where the red-hot real estate market has created a new breed of multimillionaires – of all ages and backgrounds.
Leading the charge are a handful of first generation developers, the entrepreneurs who believe in the vision of Dubai and have the kind of appetite for risk to launch and deliver projects in this market. 4Men looks at five who helm the companies that are driving the boom.
Abdul Aziz Al Awar, CEO, Mada'in Properties
As an auditor with the Dubai Ruler's Court, Abdul Aziz Al Awar got a ringside view of how the banking and finance industry in the UAE operates. "I also learnt a lot of patience and honed my judgement. It was an experience that has had a deep impact on me personally," he says.
While working at Ruler's Court, Al Awar also audited real estate companies. And when his family-owned business decided to diversify into real estate in 2005, Al Awar was more than ready to take on the leadership role at Mada'in Properties, one of the UAE's premier Sharia-compliant developers.
"My vision is to be the best private developer in the business. If we are not adding value for everyone – our culture, our investor and our end users, we have no need to be around," says Al Awar.
In an industry not particularly well known for its human resource management, Al Awar's people skills are legendary. A father of two, he is a strong believer in a workplace centred on family values. He is also a workaholic, who spends weekends on his farm. Another passion is horses – he owns and races them, often with his five-year-old son Omar.
Having grown up in Jumeirah, Al Awar is a diehard admirer of Dubai and its leadership. "Our biggest challenge will to be to sustain this growth and expand into other regions. In the UAE, every project is a winner – from International City to Dubai Maritime City. For a financial institution, an investment in DIFC is a must. For end users, Business Bay is the best choice. My advice to investors is to be aggressive or you will be out of the game."
His biggest regret? "Not buying an island on The World."
Imran Khan, CEO, Al Barakah Real Estate
A chartered accountant who ran an IT company in the UK, Imran Khan came into real estate by way of his clients who were looking to invest in the UAE.
"Being an accountant, I am conservative by nature. When it comes to business, I look at the worst case scenario," he says, adding, "I did not want a third career. The pessimist in me looked for reasons not to get involved." Like countless others, Khan succumbed.
Dubai's real estate boom is based on strong fundamentals, says Khan – the demand from tourism, healthcare, aviation, shipping and other industries. Al Barakah started off underwriting projects and established a network of over 400 sales agents across 30 countries. Last year, Khan decided to go into development.
"If you want to make money, you have to buy low and sell high. It's okay to buy emotionally if you are buying to live. But for pure investment, look at the numbers – buy at the pre-launch stage 'the factory price' and definitely before it comes into the secondary market. Secondly, look at the payment plans. Look at the profit made on the amount invested; ROI [return on investment] is the key. And don't get emotional about selling. Sometimes it's better to sell so you can use your money on another project that will get you better profits. People sometimes hold off selling for an extra 10 per cent and lose out on better opportunities. Money, like time, has an opportunity cost associated with it."
Al Barakah has plots in Downtown Jebel Ali, Dubailand and Ajman, with built-up area in excess of three million sq ft. Khan is a father of three grown up children, and his dream is to see his children join the business.
"The exciting thing about Dubai for any developer is that land can be bought in instalments and apartments can be sold on investment as well. Therefore you can leverage your business model without going to banks. [In other countries, developers have to buy land outright]. People need to understand the new regulations and ensure developers are compliant."
Mehdi Amjad, President and CEO of Omniyat Holdings and Omniyat Properties
This babyfaced tycoon presides over businesses generating $1.5 billion of sales and more than 500 staff throughout the GCC region.
Named Young Global Leader by the World Economic Forum (WEF) in 2008, 30-year-old Amjad is the man behind Omniyat Properties, one of Dubai's most tech-savvy and design-sensitive developers.
Amjad has chosen design to be the differentiator for each of his projects: whether in creating futuristic high-tech buildings manned by robots or having them designed by star architects like Zaha Hadid. Backed by infrastructure, resources and the acquisition of a 6 million sq ft land bank worth over Dhs2.2 billion, Omniyat is developing projects in Dubai, other emirates and other GCC countries this year.
This year will also see the establishment of the Omniyat Foundation to drive health and education initiatives for the underprivileged.
Amjad started off a tech entrepreneur, with Almasa Holdings, a group of IT hard-and software related companies, which he founded in 1995 with Kuwait-based partner Esmail Janathi. Almasa is currently the largest IT distributor in the MENA region. Almasa diversified into real estate by founding Omniyat Properties in 2005, with a paid-up capital of Dhs300 million.
For Amjad, the focus is still Dubai where seven new projects are being launched this year, including Omniyat's biggest ever, the Dhs3 billion Dubai Waterfront. Last year saw sales double and profits triple. This year Omniyat announced it will quadruple its property portfolio in Dubai to Dhs21 billion ($6 billion).
"In addition to the Dhs5.5 billion we have already launched in the last two years, we will be bringing to the Dubai market another Dhs15 billion ($4 billion) worth of real estate," he says.
They will also be making forays into Abu Dhabi, Bahrain and the KSA, says Amjad, adding, "We see our international portfolio resolving into revenues and profitability by the end of 2008."
"Most of our investors have achieved returns of between 100 and 200 per cent on their investment as a result of the continued strong demand for our signature and bespoke properties in the market." In its financial services, Omniyat will be moving up the value chain with new companies in investment management and, potentially, even consumer mortgage financing.
Anand Lakhiani, Director, Indigo Properties and managing director, Al Huraiz Real Estate
While the freehold market in Dubai is still in its infancy, Anand Lakhiani is one of its most seasoned players. He first came to the emirate in 1974 and along with his uncle, set up a real estate firm that specialised in rental management and brokerage. In 1982, he went solo with Al Huraiz Real Estate (named Emaar's leading agent of the year in 2006). When the freehold laws in the UAE changed to allow foreigners to own property, Lakhiani was well positioned to capitalise on the boom.
At Indigo, Lakhiani is the man responsible for identifying projects, conducting initial feasibility studies with consultants, procuring prime lands, and interacting with consultants and contractors to ensure completion. In its four years of existence, Indigo has seen growth, but Lakhiani believes new challenges lie ahead. "It's the challenge that is ahead of us that will now become our key focus as we progress on a new path to deliver yet more exciting projects and lead the market in implementing the new Strata Law regulations across our full portfolio."
Indigo has now forayed into the luxury segment, in Jumeirah Village and at Orange Lake, Jumeirah Golf Estates. "In this market, no investor can make mistakes. Everybody has made money, but the days of high premiums in the secondary market are over. You can only expect premiums on down payments now." Lakhiani recommends villas as the best option for investment now.
His words of wisdom for those looking to gain in this market? "Go with reputed names, those developers who have actually delivered the projects they have announced. In today's market, sales are the easiest part of the process for developers. I can sell anything that I announce, but the real challenge is delivering on the promise."
Harry Kantaria, Managing director, Aspire Real Estate
In real estate circles he is now known as the Man who Owns Malaysia, after a recent article describing his meteoric rise. Harry Kantaria didn't really purchase the Asian nation of 26 million, but he bought its representation in Nakheel's manmade archipelago, The World.
The 27-year-old father of one came to Dubai some three years ago from his native Mumbai. When it comes to marketing his projects, the Bollywood connect endures. Kantaria announced starlet Deepika Padukone as the brand ambassador for his firm. He has flown in many Indian celebrities and the occasional Hollywood D-lister such as Tara Reid for project launch parties.
Kantaria's Aspire Real Estate started off as a brokerage firm, then underwriting projects from other developers, such as High Rise. (If a developer is selling a building, a real estate company puts down a booking deposit, which covers the first instalment of the purchase price. The real estate company gets to buy pre-launch at a discounted rate, sell it to investors and book the profit).
Aspire's current portfolio includes The Sanctuary in Business Bay, Dana Islands in RAK, Marmooka City in Ajman, Santorini in Marjan Island, RAK, islands in the World and Al Dua'a, Dubai Marina.
