There are buyers for the right products, for the right price

There are buyers for the right products, for the right priceCity Walk is a low-rise development located at the junction of Al Wasl and Al Safa road / Image Credit: Supplied

Core, the UAE Associate of Savills, has positioned itself as a formidable player in the property sector in the UAE, combining its onground transactional knowledge with global and local research. Associated with the prestigious City Walk residences and with the soon-to be-launched Waldorf Astoria development in DIFC, Cityscape will see the company offering aspirational properties in South of France and London. Excerpts from an interview with David Godchaux, its CEO.

- Tell us about how your company is evolving in the UAE?

Historically, Core has been recognised as one of the strongest commercial real estate brokers, based on the number of transactions on the leasing sides and by the number of listings. This is how we built the reputation of the brand over the years.

The shift in our strategy came about four years ago when we decided to provide our existing clients with a much wider scope of services, offering more integrated solutions during the course of our relationship.

As of today, we are active in a few important directions: One is local as well as global residential and commercial transactional services. We help local clients acquire property in France, London, North America and Asia, while helping international clients acquire property in Dubai.

Another important part is professional services, where we offer consultancy, research, market intelligence, and corporate services. The third part of our business is project sales and marketing, combining the first and the second parts. We strategically help our clients bring projects from an early stage – concept level or even before – to the market seamlessly. Then, we deliver it with our brokerage services.

- Tell us about some of the projects that you are handling now. How would you like to assess the local market?

We're currently bringing City-Walk to the market. It's been a success so far – we've sold a lot of Building 10 and Building 7. What it tells us about the market is that you do have buyers for the right product, at the right price. We've seen fewer transactions in terms of volumes in the past 12 months, as buyers were postponing the decision to buy, wanting to catch the market at the right time when it starts to bottom out.

When prices started to soften two years ago, we saw a few panic sales at the time and people were worried. But, what they feared never happened, unlike 2008, when people were forced to sell. This is why we did not see the market crashing. Many decided to wait and hold on to their assets until the market started to recover. Now, since we're close to the bottom, if a property is priced right, people are transacting. We are going to bring the Waldorf Astoria penthouses at DIFC to the market by end of this year or early 2017. We expect strong demand for it because it is a flagship tower in a great location, and it is associated with a strong international brand.

- How is the demand for international properties from the local buyers?

Surprisingly, we still see strong demand for London and for other core European markets. We're selling quite well in Berlin. This shows there is an appetite for different types of products. There are investors who're looking for long-term, safe haven-type investments with low returns. Typically, London has been that in the past. They still believe that in the long term London will do well. These investors are not short-term investors, because no one will tell you that London will do well in the next 12 months.

At the same time, we have residential investors who are looking at a slightly higher yield. You can find that in secondary markets, and Berlin is one of those. It combines the best of emerging markets, because it is a city that is growing very quickly, and it's in Europe. Similarly, South of France has not stopped being interesting.

What I expect to happen due to Brexit is that investors from the larger GCC would reallocate part of their portfolio to potentially in Dubai or primary cities in Europe. The real estate market in France is just emerging from many years of price softening. Prices have started going up in Paris. In the US, we're at the top of the real estate cycle. It's probably not a good opportunity to enter the US market right now, except for long-term investors. In the commercial market, there are still opportunities in the Southern states in the US.

We have noticed opportunities in France and Germany, where you'll have good yields, and relatively lower prices.

We will bring an exciting project, Parc du Cap, Cap d'Antibes, from Cannes in France to Cityscape next week. It's a product for investors who want to be in a very prestigious location and in a very beautiful building. You don't have many such projects in the South of France. We're also bringing a project from the Greenwich Peninsula in London to Cityscape.

- What do you think will define the Dubai market in the next year?

I expect to see a relatively stable market with a slow recovery and a gradual return of optimism, given that we don't experience any strong macroeconomic shock. We'll soon start seeing a recovery in residential prices.

I don't think prices will go up in double digits as we saw in the past. Rents in Dubai will continue to soften, stabilising in 2017. Some residents, who have been staying here for a while, may shift from rental to ownership, if they have the cash to pay for the down payment.

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Source: Shalini Seth, Special to Property WeeklyPW


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