Tender for four new hotels to be floated before end of the year

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The UAE real estate market has remained unaffected by the ongoing global financial turmoil, believes Mohammed Sultan Al Qadi, the Managing Director & CEO of RAK PropertiesRAK Properties.

Demand rate in the country's realty sector is still high and the legislation flexibility adds an extra dose of trust in the local markets, he adds.

RAK PropertiesRAK Properties recorded 100 per cent sales rate on all the units offered to buyers in Mina Al Arab and Julfar towers - two of its key projects.

"The new regulations separating residential visas given to investors and their property ownership will not have any negative impact on the real estate market demand," Al Qadi told Emirates Business in an exclusive interview.

How would you anticipate the impact of the credit crisis on RAK PropertiesRAK Properties, and the overall sector in the UAE?
Though we are part of the world property market, I do not think we are exposed to the global financial crisis in the UAE, which enjoys safety and constant development. Moreover, we have strong infrastructure, remarkable real estate developments and a strong economy.

I think the UAE real estate market will not be affected. If you look at the demand rate which is still high, you can figure out how it is a different story here.

Another clue is that investors who chose to come to the UAE have gained high rates of profit, which they can move to other investments destinations. All thanks to the legislation flexibility, which adds an extra dose of trust in the local markets.

Has your company taken any action regarding sending confidence messages to investors, or will it?
We send confidence messages to all investors who come to us seeking assurance. But we do not do it through media.

And what about the latest update on your two major projects - Mina Al Arab, and Julfar towers?
Mina Al Arab and Julfar towers had been announced in 2005, and we commenced construction in 2006. Mina Al Arab is one of the major real estate developments in the country with a budget of up to Dh10 billion, and it comprises different aspects like residential apartments and villas, shopping centres, and hotels. It is a kind of a complete city covering an area of 36 million square foot. The project is on the schedule. The infrastructure is ready. We have started constructing villas and towers. The delivery will be according to schedule. While phase 1 is expected to be finalised by the end of 2009, phase 2 will be finalised in the first quarter of 2010. The project will be complete by 2012 or 2013 in case of any delay. Right now we are pushing to stick to delivery schedule of the project, including hotels.

In February 2006, we launched Dh500 million Julfar Towers, which is set for completion in 2009. The Julfar Towers consist of two 45-storey towers - one residential, with 349 apartments, and the other an office tower with 468 units - built over a three-level podium.

How would you describe the sales in your two projects?
Every unit we offered for sale has been sold. We have recorded a 100 per cent sales rate. But we have not put retail shops for sale yet as they are still in the design process.

What about the four hotels you are developing at Mina Al Arab?
We have four hotels which we have signed for management with Millennium, Intercontinental, Rotana, and Hilton, and consultancy almost finished with the designs. We are likely to call for tender before the end of this year.

Have the sold units recorded any premiums?
We sold out as an off plan sale. We noticed that prices in the project has recorded a 100 per cent increase in some parts, and an average of 75 per cent for most of the units in the secondary market.

Tell us about your projects, which are in the pipeline?
We have already announced the Julfar residence tower on Al Reem Island in Abu Dhabi with an investment of Dh400m. We are also working on another tower called Dhabi Tower in one of the Al Qudra real estate development areas in Sheikh Mohammed Bin Zayed City in Abu Dhabi, with an investment of Dh150m.

How certain are you about liquidity availability in the future?
As you may know RAK PropertiesRAK Properties has a sound capital of Dh2 billion. The company's founders, including the Government of RAK, hold 45 per cent of its share capital, while the remaining 55 per cent is held by the public.

We finance our projects through three different channels. The company does a self finance; sales also finance a big portion of our operation and when we required we head to the financial institutions in the country. We have not faced any problems in this regard so far.

Recently there were reports to separate property ownership by foreigners from holding a permanent residential visa. Will there be any implication of that on the market?
I do not think the new regulations separating residential visas given to investors and their property ownership will have any negative impact on the real estate market demand. The new regulations do not prevent investors to use their properties as they wish.

Who are the owners at RAK properties?
Arabs and GCC citizens form almost 60 per cent of the owners' list. Then come owners from other nationalities.

Where would you place your developments in RAK?
RAK is working on a comprehensive development of the emirate. There is a huge developments in every sector whether it is real estate, tourism, marine, industry, or anything else. The strategy followed by RAK Government is to create opportunities for investors. While developing the emirate's economy primarily through the real estate and tourism sectors, the focus remains on infrastructure projects.

The master plan envisioned by Sheikh Saud Bin Saqr Al Qasimi, Crown Prince and Deputy Ruler of Ras Al Khaimah, clearly illustrates how this is to be achieved. Basically, the idea is that public sector investment will remain focused on developing and modernising infrastructure and upgrading the provision of basic services in the emirate. The private sector, on the other hand, will drive economic progress in the emirate and will focus on developing specialist and niche business activities.

Profile: Mohammed Sultan Al Qadi, Managing Director & CEO of RAK Properties
Born in RAK in1953, Al Qadi is a prominent figure in business and leadership.

Prior to joining RAK PropertiesRAK Properties, Al Qadi had held many senior positions at etisalat for 27 years, and his last position was General Manager of etisalat RAK.

He was at one stage Chairman of etisalat Zanzibar (Zantel) in Tanzania and spearheaded etisalat's expansion into Sudan, which led to the formation of Kanartel, the country's second fixed line operator.

Al Qadi is a board member of the Commercial Bank International and RAK Company for White Cement & Construction Materials.

By Hamed Al Sewerky

© Emirates Business 24/7 2008