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With a portfolio comprising 5.5 million sq ft of real estate projects since its inception in 2002 and over seven million sq ft currently at various stages of development, Select Group is one of the most active players in Dubai’s property development scene. A multidisciplinary real estate development and investment firm, Select has residential developments primarily in Dubai Marina. The group has also forayed into the hospitality sector with the opening of InterContinental Dubai Marina Hotel last year. Select has also expanded its investment activities abroad with the acquisition of Velocity Tower in Sheffield in the UK last year.
The group is set to handover the Dh1-billion Pacific project in Ras Al Khaimah in the third quarter. It has also appointed Jumeirah Group to manage Jumeirah Living Marina Gate, which has 104 serviced apartments, 389 branded residences and 15 villas and is scheduled to open in the fourth quarter of 2019. PW spoke to Rahail Aslam, CEO, about the company’s under-construction residential developments, investment opportunities as well as his outlook for the property market.
What is the price range for The Residences at Marina Gate? What sets it apart from other under construction projects in the neighbourhood?
The average price is Dh2,100 per square foot and varies from Dh1.5 million for one-bedroom apartments to Dh4.2 million for three-bedroom apartments. Penthouses command a higher premium given the significantly larger size.
In terms of the location, this is highly sought after given the view of the sea and access to public transport through the tram, Metro and water taxis. We are offering exceptional amenities with basketball, squash and tennis courts, and nearly 150,000 sq ft of retail space on the promenade level, housing 50 outlets. Considering the constant issue of parking in the area, we have created nearly 500 visitor car parks in the development as we foresee this becoming a destination for visitors from other areas as well. The homes have floor-to-ceiling windows to give residents the best view from their apartments.
How have the residential projects under your portfolio performed during the first half of 2016?
The market has certainly been slower this year but there continues to be strong interest among buyers. Although conversion rates for clients are not as high as levels seen in 2013-14, still we have been able to sell premium apartments with a price tag higher than Dh2,000 per square foot, and post healthy sales numbers month on month. As the market in Dubai matures, the track record of a developer becomes very important. Customers want to see that they have delivered projects in the past.
Being present in an area like Dubai Marina has helped potential buyers have the requisite confidence in our ability to deliver premium projects on time.
The company is developing the Pacific project in Ras Al Khaimah. What is the target segment for this development?
The majority of this project in Al Marjan has already been sold. We are planning to hand over the units later this year. The target customers are GCC and European buyers with disposable income and in search of a holiday home. The access to reclaimed white sand beach, rooftop pool, gym and spa are all the amenities that have attracted these discerning buyers to this project.
How has the hospitality business performed during the last 12-18 months?
Average daily rates in Dubai as a whole have remained under pressure over the last 12 months as a result of currency fluctuations and oil volatility. However, overnight stay and footfalls have been increasing year-on-year and hence, we expect the hotel market to stabilise in the next 12-18 months. With the opening of theme parks and other entertainment options, six million people are expected to visit the city in 2017. For our hospitality property, occupancy continues to remain strong.
Tell us about your hotel projects in the pipeline.
We aim to increase our hospitality portfolio by 2019. Currently, the Jumeirah Living project in Dubai Marina is an addition to our growing hospitality portfolio and is the first one for Jumeirah group in Marina. Given the freehold status here, units will be sold to investors and we expect the property to be completed in 2019. In terms of our hospitality portfolio, we’re always looking for both investment options as well as operational projects.
How has the investment market performed over the last two years? Has the company identified opportunities for investment during this period?
The investment market over the last 24 months in Dubai has been more of a buyer’s market. We have been able to secure land parcels for future development at favourable terms. The appetite for investment may have slowed among companies, but deals at the right price are still ongoing.
What is your view on the real estate market in Dubai the year and beyond?
The real estate market in Dubai is currently hovering around the bottom, yet there is progressive traction given the city’s position as a leisure destination. The macroeconomic environment is also slowly improving with oil prices seemingly stabilising. The planned infrastructure spending in the lead-up to World Expo 2020 in Dubai, along with theme park opening and the US elections concluding over the next few months, should stabilise the market in 12 months.
We remain cautiously optimistic about the market at this time.
Source: Manika Dhama, Special to Property Weekly