Source : Khaleejtimes
The property market in Dubai is set to gain traction this year with investor confidence gradually resurfacing as prices have bottomed out and could only go up now, says one of the region’s realty moguls.
“It [price] is right at the bottom now and will not come down any further. Rents are coming down but not to the extent of what you call a steep fall,” says P.N.C. Menon, founder and chairman of Sobha Group, the name behind some of the signature developments in the UAE and Oman.
A regional construction pioneer now in business for 49 years, Menon believes that with property prices now down by 15-20 per cent and almost stabilised, it is inevitable they have to go up and investors have started to realise the emerging reality.
On the cyclical nature of Dubai real estate market, he says: “I will put it this way: before 2008, realty prices went to the peak. Then they came down by 50-60 per cent and bounced back from 2011-12 onwards to pre-2008 level. The upward cycle persisted till the first half of 2014 and started retreating. Since then prices have come down by 15-20 per cent.”
The developer, who is building the $4 billion Sobha Hartland community in Dubai’s Mohammed bin Rashid City and jointly developing the $8 billion Meydan Sobha District One community in Dubai District One with Meydan Group, believes that the future of realty in Dubai, the city of choice for the world’s richest, looks brighter than ever before.
“A cosmopolitan city that is home to over 200 nationalities, Dubai is like a magnet for all those who yearn for a quality of life in a safe environment. Housing requirements will continue to grow in tandem with the population surge, at least for the next 10 years,” he says.
“The population of the city is currently 2.8 million and is poised to gradually grow by 4-5 per cent. That means the requirement of housing will go up correspondingly. As a developer, as long as you can keep your brand value, you are very safe,” says the developer who is also behind the Dh25 billion tourism resort – Firdaus Sobha – a joint venture with the government of Umm Al Quwain. The landmark project covering 53 million sqft site on the island, which is 1.2km from the shoreline, is on track to be completed in 10 years.
“Our goal is to make sure that we tap the growth potential and double our annual sales within the next three years to Dh2.5 billion, excluding joint venture sales. Now the annual group sales are close to Dh1.25 billion,” says the builder who claims to be world’s only fully backward-integrated developer. “In other words, Sobha has complete in-house expertise with all specialties required to achieve a project from concept to completion.”
Menon, who did not rule out Sobha Group’s possibility of going public in the UAE “when the time is right”, sounded upbeat about the near-term growth prospects of the region’s realty market in general with several residential and commercial projects nearing completion ahead of Expo 2020 Dubai. Sobha Hartland will see delivery of its first 48 luxury villas and two apartment buildings 167 units in June.
Just as the Sobha brand has made its mark in India as “the top national realty brand across asset class” for the third consecutive year in the Brand X Report, Menon wants to replicate that feat in the UAE in the near future and is confident that Sobha would be able to reposition itself among the top three UAE brands in the next few years.