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In February, Dubai Properties Group (DPG) unveiled the master plan for its first affordable housing project. Consisting of villa clusters of four to six units, Serena is a community spread across a total area of approximately 8.2 million sq ft in Dubailand. Phase one of the project consists of two- to three-bedroom town houses and three-bedroom semi-detached villas, with Mediterranean Spanish architecture.
Legislation pertaining to affordable housing was introduced by the government last year. While the definition of affordable housing may vary, it usually pertains to good-quality housing that requires a maximum expenditure (rent or mortgage) of approximately one-third of the gross income of middle and lowerincome households, according to property consultancy Cavendish Maxwell’s white paper titled Affordable Housing Delivery. In Dubai, this segment includes households with earnings of up to Dh20,000 per month. The paper also highlighted that the cost of land is a significant burden on the overall cost of development. Developers also have to maintain an expected profitability target, so they tend to build more higher-end residential units instead.
Construction risk is another area of concern when evaluating affordable housing. However, development structures exist that can allow such projects to be offered through reduced residential unit prices, while maintaining an appropriate profit to a developer.
PW spoke with Masood Al Awar, Chief Officer Commercial at Dubai Properties, who is responsible for overseeing the development of client solutions and target delivery in both new and established market segments. Here he talks about the groupfs foray into affordable housing, while highlighting the key trends in the residential real estate market in Dubai.
Why did you choose to enter the affordable housing segment now?
We looked at the launches happening in Dubai and studied the market to identify demand for different segments. Our plan is to support the vision of the city and to ultimately build destinations. This is what our affordable segment project is about - to fulfil requirements for the city and to globally sustain the real estate industry of Dubai.
Can you highlight the price band and payment structure for the Serena project?
We estimate the demand for villas to be high and Serena offers customers properties of good sizes. The prices for the project start from Dh1.25 million, with sizes ranging from 1,473 sq ft (twobedder) to 1,821 sq ft (threebedder). The payment plan is structured such that 40 per cent is paid during construction (10 per cent on signing and 5 per cent every six months), with the remainder (60 per cent) to be paid upon handover.
What according to you is the unique selling point of this project?
Serena will feature a variety of amenities comprising recreational facilities, swimming pools, gym, play areas and a health care facility, making it ideal for families. The unique design encourages community living and enhances the lifestyle of its residents with outdoor activities, making it an ideal location for families looking for a lively residential destination.
What is the reason behind choosing Dubailand as a location?
Dubailand is a strategic location, which offers a community living concept. In close proximity to Downtown Dubai, Serena enjoys direct access toEmirates Road and it is surrounded by a number of well-known communities developed by Dubai Properties, including Layan and Al Waha. The office areas of Business Bay in the vicinity is a strong factor in making this a good option for both investors and end users.
What is the timeline for this project? Would all the phases be completed prior to the World Expo 2020?
Serena will be developed in five phases, with the first phase anticipated to be ready by Q3 2019. The contractor for Serena II will be on board in three to six months.
How has the sales experience been for projects in 2015 and what are your expectations for 2016?
The release of the first phase of Serena, Bella Casa, was sold out on launch day. Additional units were released a week after and they were sold out as well. Based on the significant demand, the third release was launched. In 2015, we sold 1,093 units and handed over almost 811 units.
This was a sign of a stable market, even though customers had a wait-and-watch approach. The first quarter this year also saw successful launches and our outlook for this year remains positive. The mandate for our company is to keep customers at the centre of all our offerings. We have adopted it as an organisation-wide commitment.
What are your expectations for the affordable housing demand after the Expo 2020 is over?
We expect the demand to continue even after Expo 2020, fueled by economic growth, job creation and a rise in population. With continued government support, focused legislation in the real estate sector, especially those pertaining to mandatory affordable housing requirements in all projects, and increasing public-private partnerships, we expect good-quality affordable housing to see a healthy demand and development in the coming years.
Do you expect to see any new trends developing in the residential sector in the coming years?
The two focus areas in upcoming residential developments will be sustainability and the smart city concept. Dubai itself is focusing on becoming a smart city and a platform for exchange and sharing of competencies.
Increasing transparency has also made the city a key destination for foreign direct investments. Both end users and investors stand to benefit from the next phase of developments in the city. With over a decade of experience as one of the top developers in the country, Dubai Properties’ objective is to continue to play a key role in enhancing the landscape of Dubai and shaping the future of the real estate industry.
Source: Manika Dhama, Special to PW