Sunday, Jan 29, 2017

Dubai: With Dubai’s property market seeing transaction gains, developers are now willing to go the extra mile to get them buying. Properties Investment — the joint venture between Dubai Investments and Union Properties — is offering post-handover payment plans that can stretch from two to six and even eight years. This is for the 200 odd town houses making up Phase 3 of Green Community West, among Dubai’s first batch of gated communities.

While post-handover payment plans are fairly commonplace these days, extending it to eight years makes the PI offer stand out that extra bit. And it is also coming direct from the developer, thus circumventing the need for a mortgage provider.

The homes are to be delivered later this year, with unit sizes of 4,200- to 4,500 square feet and prices at Dh850 a square foot. “Much depends on the payment structure to convince whatever number of buyers there are out there now — there is no way any developer can determine actual demand,” Khalid Bin Kalban, Chairman of Properties Investment. “One thing the market should guard itself is against oversupply.

“But based on what we see now, 2017 should offer better prospects than last year.”

Properties Investment will continue to handle value-added projects in existing developments, Kalban added. This includes The Market, a shopping centre within Green Community, “at least three residential buildings and even a possible fourth phase.”

“All three — Dubai Investments, Union Properties and Properties Investment — have its own space to develop. They can call in their own funds to do what they want.”

Significant interest

According to Rashid Abdullah Al Haji, “Green Community West has got about 2,000 homes, with the earlier phases receiving significant interest when they were introduced. The two-, six- and eight-year post-handover schemes gives us a chance to tap investor interest for an already established residential destination.”

Kalban said that there are no immediate plans to float Emicool, the district cooling company jointly owned by Dubai Investments and Union Properties. “The current upturn in the stock markets has a lot to do with speculation as investors wait on the results and whatever dividends companies may issue. The momentum has to hold a further three to four months before we can be sure that the conditions do exist for an IPO.

“But Emicool will be the most suitable candidate in our portfolio if it comes to that. Dubai Investments’ [private equity arm] M’sharie will not have a float as such — more likely one of its group companies might have one.”

January has continued the pace of new launches from local developers, and these day there is no single asset class that is being favoured by them. Recent ones have been primarily high-end properties, but this week will also a launch at Jumeirah Village, tuned towards the mid-market.

Plan B

Meanwhile, Dubai Investments said it will keep pushing for equity exposures in health care and educational assets through its association with Al Mal Capital. “The problem is that once we let out that we have interest, the owners raise their values,” said Kalban. “There was one hospital we were interested in … but that got nowhere.

“But we do have a Plan B — we should be able to commit to a fairly large investment through Al Mal in the next two months or so. But there have been other smaller transactions, one of $10 million and another of $20 million. The bigger ticket items will come in due course.”

Investment firms have been changing the mix of their property acquisitions … no longer are they going for only residential or office buildings. Health care and education related assets in Dubai have been top picks, among both local and regional investors. For the investors, the best part is that these assets are usually pre-leased or might have a strong existing tenant base.

By Manoj Nair Associate Editor

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