Undeterred by a prevailing slowdown in the UAE’s real estate market, Dubai-headquartered Azizi Developments is set to launch new off-plan projects during the Cityscape Global exhibition starting today at the Dubai World Trade Centre.

“During the event, we will announce new off-plan projects, release new unit types, and provide visitors with detailed insights into the soon-to-be-delivered ones,” said Farhad Azizi, CEO, Azizi Developments, in an email interview. 

The company, he continued, will also announce new offers including “exceptional starting prices, convenient payment plans and affordable home financing solutions during the event.”

The private developer currently has over 200 projects at various stages of development of which eight are due for handover by the first quarter of 2020, including five buildings in Al Furjan; Phase One of Riviera in Mohammed bin Rashid City; Mina on Palm Jumeriah; and Aura in Jebel Ali.

“Our outlook for this year’s event is significantly more positive than last year, given the buoyancy of the economy led by newly introduced government initiatives, the effect of Dubai Expo 2020 preparations, the growth in the national GDP, and the surge in the overall tourism industry,” he said.

Earlier this month, a Reuters report said that Dubai house prices will decline sharply this year and next, according to property market experts in a Reuters poll, who said a slowdown in the economy and an oversupply of housing units are big downside risks to their already weak outlook.

Farhad Azizi, CEO, Azizi Developments
Farhad Azizi, CEO, Azizi Developments
Farhad Azizi, CEO, Azizi Developments (Azizi Developments handout via Thomson Reuters Projects)

Farhad Azizi, CEO, Azizi Developments. Image supplied by Azizi Developments.

Azizi agreed that currently it is a “buyer’s market” as prices are still low, but insisted that Dubai’s real estate sector is already on a path of resurgence, backed by the strong economic fundamentals of the UAE and the catalytic effect of new governmental initiatives, such as the newly introduced visa regulations that welcome more professionals and encourage residents to invest in property.

The UAE’s zero-tax regime is also an attractive proposition for high-net-worth investors at a time when, as Azizi explained, wealth taxes are on the rise in many countries, with one study suggesting a net gain of more than 5,000 high-net-worth individuals in the emirates last year.

With the emirate’s population and economy continuously growing, the company expects the market to witness a considerable upswing in demand. “It has already been increasing since December 2018, with our sales growing rapidly,” he claimed.

The developer also expects Expo 2020 to have a positive impact on the real estate sector as the event is set to welcome over 25 million visitors, which is expected to boost the economy by over 3.5 per cent.

“The after-effects are tremendous too, with more tourism entering the UAE, business relationships being established, and more economic activity to be brought to the emirate,” he said, adding that the developer has projects in areas that with easy accessibility to the Expo 2020 site. 

Demand-supply paradox

Azizi said he does not entirely subscribe to the notion of there being an oversupply in the near to long term. “There can only be an oversupply if demand can’t keep up, but our research shows that demand in Dubai will continue to increase exponentially,” he said.

He pointed out that every market has its ups and downs and it is part of any normal cycle. “Downs in the market can be overcome,” he said, adding that developers need to tailor their products to evolving market needs, such as by developing in strategic locations with good connectivity that offer attractive ROIs, and by focusing on the right sizes and types of properties.

 “Those who adapt to the changing market conditions and deliver quality properties that are part of well-thought-out communities, and that comes with certain lifestyles, amenities, retail and leisure options, and so forth, will thrive,” said Azizi.

“The first six months of 2019 have been significantly better for us in terms of sales volume and revenue than the first two quarters of 2018,” he added.

The under-construction Azizi Mina on the Palm Jumeirah, Dubai. The project is being developed by Azizi Developments.
The under-construction Azizi Mina on the Palm Jumeirah, Dubai. The project is being developed by Azizi Developments.
The under-construction Azizi Mina on the Palm Jumeirah, Dubai. The project is being developed by Azizi Developments. (Azizi Developments handout via Thomson Reuters Projects)

The under-construction Azizi Mina on the Palm Jumeirah, Dubai. The project is being developed by Azizi Developments. Image supplied by Azizi Developments.

The China factor

One of the key factors driving property demand in Dubai is the increasing participation of Chinese investors. According to a recent Dubai Land Department (DLD) report, investments by Chinese nationals accounted for 1.7 billion UAE dirhams ($462.8 million) in the first three quarters 2018.

Azizi said China is set to become one of the largest groups of real estate investors in the UAE with more than one billion dirhams in expected investments this year.

“A large number of Chinese nationals are investing in Dubai's real estate market as a result of the strengthening of bilateral ties and the implementation of the Belt and Road Initiative (BRI)…,” he noted.

He said the current trends in the Chinese stock market and property markets, both of which have been experiencing rapid growth in recent years, have encouraged upper-middle-class Chinese nationals to invest in overseas markets, including in Dubai.

“Depreciation of the Renminbi as well as the promising rental yields in Dubai, influence Chinese investors’ demand in properties in the emirate,” said Azizi.

The company has seen its number of Chinese investors increasing by five per cent so far this year alongside Saudi Arabia, which has grown by eight per cent.

“With demand from Chinese and Saudi investors on the rise, we are tailoring our offerings to their specific needs to serve them better,” he said.

The company, he noted, has developed a strong customer base in India, Pakistan, the United Kingdom and the UAE.

Expansion plans

In order to tap into further opportunities, Azizi revealed that they are hiring local advisors and conducting extensive research into locations, value appreciation, rental yields, and market needs.

To date, the company has completed 14 projects in Dubai, as well as 41 buildings and six shopping malls internationally.

He said their current restructuring efforts are not merely aimed at stabilising the business here in the UAE but also take Azizi Developments to greater heights.

The developer has delivered over 8,200 homes globally, with another 4,000 units due to be completed by the first quarter of 2020 and has expansion plans for “high-growth markets” that offer strong development prospects, such as Abu Dhabi, Germany, France, and the UK, as well as Saudi Arabia.

“We want to demonstrate that a UAE-based developer can establish iconic properties across the world,” concluded Azizi.

(Reporting by Syed Ameen Kader; Editing by Anoop Menon)


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