|20 August, 2019

"Amazon.com for property" betting big on Bahrain

Dot Residential says it is offering investors anywhere in the world, the chance to “instantly buy real estate in the UK and USA”

Image used for illustrative purpose. Middle East professional business people are in a meeting with laptop at conference table.

Image used for illustrative purpose. Middle East professional business people are in a meeting with laptop at conference table.

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MANAMA: A UK-based business aspires to be an “Amazon.com for property investing” for Bahrain-based expats and nationals.

Backed by a Bahraini family office, Dot Residential says it is offering investors anywhere in the world, the chance to “instantly buy real estate in the UK and USA”.

The start-up leverages ‘proptech’ – a combination of property and technology – to condense the traditionally long, expensive and painful property buying experience into a few minutes.

The Dot platform features an online checkout and dashboard where an investor can track the performance of their assets.

It also includes the world’s first point-of-sale mortgage.

Co-founder and chief executive Gray Stern told the GDN that real estate is the most popular asset class and yet the hardest to transact.

“Currently, $150 billion is invested into UK and US real estate every year from investors in the Middle East and Asia alone, but the experience is painful,” he said.

“The best investments are hard to access, estate agents are rarely trustworthy, a typical purchase takes around six months and means interacting with more than 20 service providers and intermediaries.”

According to him, 30 per cent of all purchases fall through mainly due to legal and finance work being done only once a sale has been agreed.

“Dot front-loads this due diligence (both investment feasibility and loan underwriting) prior to making the property available on its marketplace,” Mr Stern explained.

The company’s solution packages up analysis, sourcing and negotiation (finding properties with the best potential); pre-approved finance (instant mortgage) and legal due diligence; fixed price refurbishment, interior design, and amenities; tenant onboarding and property management.

“This means that when an investor commits to purchasing a Dot property there are no holdups, zero opportunity cost and funds can be deployed quickly and easily into vetted, cash-flowing assets,” he said.

Commenting on how long it takes to transact the Dot way, Mr Stern said, it is instantaneous for an investor acquiring an existing (not new build) property held within a Dot container.

“This is because the investor is in fact acquiring a 100pc stake in a UK Limited Company Special Purpose Vehicle that already holds clear title over the property.”

The owner of the property can sell it at any time (both as a Dot Container and in the traditional way).

Dot had a soft-launch in April this year and currently has 40 units under management.

The company expects to operate in around 20 cities and deliver around 2,000 units a year by 2021.

Mr Stern said Bahrain and the wider GCC region are a core focus area as Dot looks to target the region a lot more on the back of the “initial positive response”.

“We are currently working with investors from Dubai, Bahrain and Kuwait and have already done six deals so far,” he said.

The company is confident of selling its proposition in the region, specifically “the next generation of investors who are comfortable transacting online”.

“Interestingly, we have witnessed the sons and daughters actively promoting our digital concept to their parents in the GCC, which is pretty cool and bodes well for our future.”

Co-founder and chief commercial officer Lucy Sharp said Dot has also drawn interest from GCC venture capitalists looking to get involved in its next funding round.

Commenting on the looming Brexit and a possible global recession, Ms Sharp said Dot viewed it as an opportunity given the resilience of well-located and managed rental property during economic downturns.

“There are great buying opportunities at the moment and the pound sterling has depreciated significantly.”

According to her rental cash-flows in fast-growing cities underpin the viability of Dot properties, so it is not driven by speculation on short-term changes in property prices.

The founders have set themselves an ambitious target of 1pc market share of global cross-border residential investment transactions.

avinash@gdn.com.bh

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