Don’t get too excited with success

A eureka moment led Ali Thumbi to open a realty firm in 2005. He tells PW how an inexperienced newcomer triumphed over adversityImage Credit: Supplied

The property sector’s turnaround has already started, says Ali Thumbi, CEO of Aqua Properties, who believes the current price correction and other global factors like Brexit, or the UK’s exit from the EU, will work positively for Dubai.

Thumbi came to Dubai in 2004 with plans of establishing a food and beverage business. While looking for a location, he found the rents in Dubai were very high, which made him consider venturing into the property business in the emirate.

The decision paid off rewardingly as Aqua Properties has grown into a diversified services firm. The company offers project management, development, investment advisory, real estate supervision management and international consulting services.

Thumbi tells PW about the company’s plans at this year’s Cityscape Global and his views about the future of the property sector.

What will be Aqua Properties’ best sellers at Cityscape Global?

We will offer products for the entire spectrum of the population. Like in the past two years, we will be the project marketing sponsor at Cityscape Global 2016. Selling off-plan projects has been our forte for over a decade now.

This year we are working for Alcove by Grovy, a ground-plus-five low-rise development comprising studios and one- and twobed apartments in Jumeirah Village Circle. It is a midmarket residential project targeting the mid-income group. We are offering two types of payment plan – one with a 20 per cent down payment and 80 percent on completion and other will be a post-handover payment plan extended up to two years.

Then we will highlight Park Inn by Radisson, a fourpodium, 25-storey furnished hotel apartment with 261 rooms in Jumeirah Village Triangle. It is a self-managed investment project. The branded units are managed by Radisson and get a guaranteed yield of 8 per cent net for three years from the time of handover, paid on a quarterly basis. It will appeal to a significant number of audiences as over 50 per cent of people purchasing in Dubai are buy-to-let property buyers.

We will also showcase our premium development, J8, a ground-plus-eightstorey low-rise residential building in Al Sufouh Garden community next to Media City. We delivered our first building, J5, last year and will hand over J8 next month. The project offers premium-quality homes with the advantage of living in a central location. For buyers at Cityscape, they’ll be investing in a project that is close to handover, where they will pay 25 per cent down payment and remaining at handover. As an incentive for buyers at the event, the developer will cover the 4 per cent registration fee on behalf of the customers.

We are also promoting SkyCourts Towers by the National Bonds Corporation in the Dubailand Residence Complex. The development offers around 3,000 apartments comprising studios and one- and two-bedroom apartments spread across six towers. We have acquired 140 units [and are offering them] on preferred payment plans extended up to eight years with zero down payment. The project allows people in the lower income group, [particularly those] below the Dh10,000 income bracket, who do not have savings, to buy units.

What are the services you offer?

Aqua Properties has two different businesses — one is the services business and the other is development. We have been gradually adding teams and building the diversified business model over the past 11 years.

Our development arm focuses on building properties. J5 and J8 are our current developments, whereas our services segment performs several functions, including project marketing, where we work closely with  developers to promote their off-plan projects, and the brokerage business — buying and selling property.

We also have property management, where we manage realty assets for the customer — rent it out, look after tenant-related issues, etc. The other business arm is Highrise Owners Association Management (HOAM), a joint venture with an American company wherein we manage common areas of finished developments.

We also do development management business that offers consultancy and turnkey solutions to the landowners, investors and developers including appointing architect, contractor, etc and managing the project. We also have our contracting company. This makes us a truly an integrated services product platform to cater to multiple requirements.

What is your outlook for the last two quarters?

The number of enquiries and transactions have already risen this year  compared with last year. If any economic or financial event happens, its impact on the real estate cycle is not seen immediately. For instance, if the stock market jumps and a lot of money is made, it is not that the real estate segment will follow next day. We have noted that it always takes around 6-12 months before we see the impact of it on the property sector. However, I consider the market turnaround has already initiated.

I am very bullish because of a few global factors that in my view will work positively for Dubai. First is the price adjustments seen in the last two years. Property prices have corrected by 15-20 per cent across Dubai, making property cheaper and attractive for buyers.

Second is Brexit. A lot of Middle East money has stopped going to London real estate due to the uncertainty around the pound and the market itself. That money will find a new destination for investment and Dubai stands to be a top choice because of its location in the region, plus the rapid infrastructure growth happening in the city that makes it an attractive destination.

Therefore, I foresee renewed interest in Dubai that will drive the market this year and the next. Moreover, in the next year, World Expo- related construction activities will start, which will further drive demand in the market since more people will be moving into the city.

Another positive factor for the city are the multibillion theme park projects that will open this year, which will bring tourism demand, create new jobs and improve market sentiment. We have already seen a need for staff housing and have leased full buildings for staff accommodation.
I am confident that by the end of the year we will see much better pricing than where we are today.

With several new communities being developed, how has Dubai’s landscape changed?

In the earlier years, Dubai’s entire master plan was focused on creating commercial hubs like Dubai Media City, Dubai Internet City, Health Care City, Dubai International Financial Centre, etc. However, the initial phase of these communities did not have a lot of residential developments planned around them.

Now we see new communities continue to have the commercial angle as a magnet, but residential offerings are added to support them, creating a complete lifestyle package. For example, Dubai Studio City focuses on being a hub for media professionals, but it also has residential developments.

This change will increase people’s efficiency and productivity because there will be less commuting, so they will have more hours for other activities. Right now the biggest challenge is that almost 20 per cent of people’s time is spent travelling from home to work and back. However, the new master communities are going to change this.

Dubai was a small city but now it’s growing bigger. Even the old areas of Dubai are being replaced by newer locations such as Business Bay.

Earlier a good weekend attraction was Al Diyafa Street (now 2nd of December Street), and five years ago it was Jumeirah Beach Residence. Now it’s City Walk. Every four to five years the city evolves [with new] master communities, business hubs and leisure attractions. In the coming three years, we will see the Dubai Canal as the next  entertainment  destination.

What changes have you noted in the sentiment of property buyers and sellers?

Dubai does not have a large population of its own, and it is widely dependent on expats – Indians, Pakistanis, British, Middle Eastern Arabs, etc. For many expat buyers, Dubai is a transient city, where they may work and live for five or 10 years, but they don’t see themselves being here for the next 50 years, which influences their purchase decision.

Dubai is steadily growing. There is massive growth in population and vast infrastructure development across the city, so it is doing the right things to be an attractive destination. However, buyer sentiment here is subject to conditions they see back home.

I see the present market sentiment to be upbeat because of external factors that I talked about earlier. These conditions might stay for  another two to four years, but it’s hard to predict exactly how long they will remain.

 What brought you to the real estate business and what lessons have you learned fromthis industry?

I did not plan to be in the property business. I came to Dubai in 2004 with plans to be in a food and beverage business and started looking for a retail location. Back then, the rents were increasing. For three months I would visit and revisit different locations, and every time the owner would increase the rental price. So I realised that real estate could be a rewarding business. Out of sheer coincidence, I ended up entering the real estate business and established Aqua in 2005. I developed a passion for this industry and gradually grew my business, adding different business models to it.

Over the 11 years of being in this business, I have observed people can make a lot of money and lose a lot of money, as money here can come easy and go quickly. However, the ones that will flourish for long term are the people who stay grounded and do not get too excited with their success.

Source: Hina Navin, Special to PW

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