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Union Properties (UP), one of the oldest property companies in the UAE, was established in 1985. It has evolved along with the emirate of Dubai. Starting small as a property management company that looked after a couple of buildings for Emirates NBD, UP transitioned into a large master developer of projects such as the Dubai Autodrome, Dubai Motor City, Dubai Sports City, Green Community, Dubai Investments Park (DIP) and Uptown Midriff.
Ahmad Khalaf Al Marri, Group General Manager of Union Properties, talks to PW about the company’s newest projects.
What are your latest developments?
This has been a year of planning for us. We have a number of projects under way. We are working on three key projects worth $544.5 million (Dh1.99 billion) — The Green Community in DIP, Oia Residences in Dubai Motor City and The Link, a hotel and high-end restaurant in Motor City. In addition to these, we have almost completed two of our retail projects—The Ribbon in Motor City and the expansion of Uptown Mirdiff.
Tell us more about these projects.
The Ribbon Motor City is a commercial development that contains 11 retail units and 16 new food and beverage outlets. It is in the final stages of completion; we will launch it on November 1. With The Ribbon, we plan to surprise the residents of Motor City. They will welcome the new addition to their community. We are currently in the final stages of negotiations with prospective retailers and hope to announce the names soon.
Oia Residences is the one to watch out for. It is a G+5 development that has been designed with the idea of bringing Greece to Dubai. It is named after a small town on the island of Santorini. The design of the project draws inspiration from the white-painted houses of the Greek islands. The project has 271 residential units, including duplex apartments with private gardens, terraces and direct access to swimming pools. The project is worth Dh440 million and is likely to be completed by November 2017.
Over the years we have been working towards transforming Uptown Mirdiff into a great community service mall as opposed to the traditional mall. We have been redeveloping Uptown Mirdiff. We will be adding 46,761 sq ft of leasable space to the existing mall, with a total value of Dh70 million. We have already signed up with the Dubai Health Authority, which will be opening a large medical facility. We are also bringing new restaurants to that side of town, such as Dominos Pizza and Zaatar W Zeit. Phase one of the development will be complete by September.
We have just started construction as part of the expansion of Green Community in DIP. It’s just the beginning. We are currently laying the foundation and expect to finish it by July 2017. Once completed, it will have 210 residential villas and 16 duplex apartments, with a total investment of Dh700 million. We are also working on a five-tower project — The Vertex in Motor City. It is at the gate of Motor City, which leads to Al Qudra Road. The project will have 700 units. We are currently finalising the internal design of these units.
Tell us about the leisure and entertainment district in Motor City that UP is working on.
We have a huge area allocated for leisure and entertainment. On the entertainment side of things, we are studying the market and are in discussion with the Dubai Government on the kind of projects that will complement the offerings of Motor City and Sports City. On the leisure side, we have recently sold a plot of land for a hotel to a Saudi-based developer.
What can visitors expect from UP at Cityscape Global this year?
We have something special planned for Cityscape. We will be showcasing The Oia Residences. It will leave every visitor surprised; the design is very beautiful, like nothing that Dubai has seen before and will attract a lot of interest.
In addition, we will be opening sales for the Green Community expansion.
What about the pricing and payment plans for the Green Community expansion projects?
It is a tried-and-tested community; people are already living there. They know what the product looks like and the residents appreciate it a lot. We will not be surprised if most of the investors or buyers are from within the community itself.
The payment plans for Green Community will be 10 per cent each in eight phases and 20 per cent at the time of handover. We have also tied up with Dubai Islamic Bank. They will be offering attractive financing options for interested buyers.
We [are] expecting [to sell at] Dh900-Dh1,200 per square foot, depending on the unit.
When will UP start sales for Oia Residence?
Beginning of next year.
Can you update us on your rental portfolio?
We have a few properties in the rental business. The rental business is small in the overall scheme of things. It is roughly 9-10 per cent of our profits. However, we have a view to expand our rental portfolio. We have decided not to sell any of the retail properties and will only be leasing them.
In the current market, the potential for rental and retail are stronger.
What is your take on current market trends?
There is demand for residential and retail, however, demand for commercial is still low. The demand is specifically high for retail. That is why we are seeing a lot of retail projects.
Dubai is a very attractive location in the world. New people are coming into the city. The World Expo 2020 has also helped; it has created a positive mindset and the residential, retail and hospitality sectors have got a great push.
There has been a slowdown in residential sales, which I expect to continue. It may well go into 2016. People are watching and considering the options. In 2016, I expect handovers of projects that started in 2014, so there should be fresh supply, which also adds to the options people have. So things might stay the same for a year or so before the demand beats the supply again.
In 2017 the market will be better than 2016.
Will this Cityscape Global be impacted by the current slowdown?
Visitors go to Cityscape for two things — to buy or to see what’s new in the market. Given the sentiment today, most investors are watching the market and would go to see what’s new. This Cityscape will be ideal for them, as I expect a lot of new projects [to be launched].
Can you talk about your net profits, which have been falling over the last few quarters?
There are a number of things to consider when you look at the profits and losses. A decline does not necessarily mean that the company is doing badly. A key thing to consider in our profits and losses would be the gain on the valuation of properties. We cannot expect the same gain every quarter or year. Even though the profits have fallen, the company is in a strong position; we are covering all our expenses, paying all our debts and have a healthy cash flow.
Source: Ashutosh Gupta, Special to Property Weekly