Making a mark on the Dubai skyline with Marina 101 billed as the tallest hotel apartment tower in the world is Sheffield Real Estate. But for Abuali Malik Shroff, the company's managing director, it is just the beginning.
He plans to invest more than Dh5 billion in Dubai's real estate market by 2009, banking on the emirate's expected boom in the tourism sector.
"We are looking at encashing the potential of the tourism sector in the near future, so as to bring benefit to our investors," Shroff says.
Sheffield is guaranteeing a return of 8.33 per cent per year for the first three years to buyers in its Dh1.4-billion Marina 101 project in Dubai Marina, which will be completed in the first quarter of 2010.
"We will manage the property on behalf of our investors, assuring them a return of 25 per cent over a period of just three years on their investment. An investor will certainly get back his money in five to six years." The company is estimating the return on investment, keeping in mind the booming tourism sector.
"We are looking at the short-term rentals, as tourists from Saudi Arabia, Bahrain, Qatar and Kuwait seek accommodation for 15 days to one month.
"These people prefer to stay in furnished apartments, where they get facilities of a five-star hotel at reasonable rates. Moreover, they get the comfort of their home." According to the Department of Tourism and Commerce Marketing (DTCM), the number of hotel guests in Dubai touched 6.3 million in 2006, compared to 6.1 million in 2005. The number is expected to rise with Dubai focusing on becoming a regional financial and education centre.
However, Shroff doesn't believe property prices in Dubai, or the UAE in general, are on the higher side.
"You don't get anything at £1,000 per square metre (about Dh7,307) in London. Even a house on the outskirts of central London will cost more than a place in International City," he said.
He rules out any "big" correction in property prices, but feels there may be minor correction of three to five per cent in coming years.
According to Shroff, the secondary market is not at all that vibrant currently. However, once the property laws are in place and mortgages are calculated on the property rather than the individual's credit criteria, prop erty prices in Dubai will soar.
"When everything falls in place, property prices will shoot up as even the common man will then have to pay a small percentage as down payment to buy a property," said Shroff.
The escrow account law, expected to be unveiled soon by the Dubai government, will come in as a boon for developers, he says.
"I would prefer the escrow account, as then I don't have to go to the bank for finance. The bank holding the account will itself be the financial institutional. And then it will be more easy for me to get funds as they [banks] only pay for construction, or to end users," he added.
Currently, Sheffield has a land bank of 500,000 million square feet, valued at more than Dh1bn. The company recently launched Corporate Tower, its first commercial project, in Jumeirah Lake Towers community in Dubai, at an investment of more than Dh300m.
"Commercial real estate has always stood out as a stable investment throughout the world. We see a continuing surge in interest in this segment in Dubai and our project is conceived to offer better returns to our investors," said Shroff.
Corporate Tower is Sheffield's seventh project in Dubai, with the company recently handing over units at the Supreme Residency, located in the Central Business District in the International City.
The company is also firming up investment plans in various other residential projects, and will invest Dh700m to construct a gold and diamond retail mall in Dubailand.
By Parag Deulgaonkar
© Emirates Today 2007
