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Mohamed Abu Zid wished he could have done a lot more than wait three months until his new office in Dubai Marina was ready for occupancy. The Egyptian realtor is General Manager of ADMRI Real Estate Brokers, which inaugurated its new headquarters on the 13th floor of Marina Plaza last month. Abu Zid says he didn’t mind spending Dh500,000 furnishing the shell-and-core unit, but he’d have preferred moving into a ready office - except he couldn’t find one. “Most of the units in the office market are shell and core,” he tells PW. “That’s a problem.”
It’s time property owners and developers think of new ideas to add value to the office market, he says, noting how many businesses would rather move into new offices immediately than have to deal with design and fit-out contractors themselves.
In an interview with PW, Abu Zid argues office tenants deserve better options than what’s on the market.
• What is ADMRI?
ADMRI Real Estate Brokers is a subsidiary of Abu Dhabi Marina Real Estate Investment, a real estate investment company founded in Dubai in 2009. By the end of last year we decided to add a brokerage arm. The new Dubai office serves as our headquarters with a branch in Dubai. We plan to expand our network to eight offices in the region in the next five years.
• What is your main focus?
Abu Dhabi Marina Real Estate Investment has two main activities: real estate development and asset management. We have signed an agreement with the Egyptian Arab Land Bank (EALB), one of the biggest banks in the Middle East specialising in real estate investments. We represent EALB in the GCC. The value of the bank’s dynamic portfolio is about two billion Egyptian pounds (Dh963 million). We promote and sell the bank’s properties to Egyptians and other nationalities in the region. What’s the profile of the buyers of these projects?
Many Egyptians in Dubai look for class A or class B property. In other countries, class C properties are more in demand. Class A residences are mainly luxury villas, which could cost between three million and five million Egyptian pounds.
• Can you talk about your core business in the UAE?
Our brokerage business in the GCC, ADMRI, is headquartered in Dubai. We have around 24 agents and a team handling property in Dubai and the northern emirates, a team handling international sales and a team in our Abu Dhabi branch. We want to expand further in the next two years with more branches and subsidiaries in the GCC.
• You seem to be confident of your prospects.
We are in a very stable market. There are less transactions, yes, but this is very healthy [in the long run]. The government has announced that expenditure would be on the same level. This is also very encouraging. Prices have now reached moderate levels, with the average price in Dubai between Dh1,200 and Dh1,600 per square foot. Overall we are at a good point in the real estate cycle.
• What about the recent price fluctuations?
Five or 10 per cent fluctuations in real estate values is reasonable. This is standard in international markets. The market will not move without a correction. This is how the industry works.
• But a report said property prices rose by more than 50 per cent in two years to June last year?
You can forget those numbers, especially with the new regulations from the government aimed to stop speculation. That was not healthy.
• What are your thoughts about the commercial real estate market?
The market still has huge potential to attract more investors, especially from abroad. The problem is that most of the offices are still shell and core. Instead of just allowing clients to take the unit and start their business, you put them in a situation wherein they have to think about the cost of the fit-out. For some clients, we need to eliminate this step. There are clients who would really just want to take possession of the property and don’t want to be bothered with decisions regarding the fit-outs.
We did this in some of our prime commercial leasing units in Abu Dhabi a few years ago. We invested Dh60 million to fit out the units. All the units have been leased and we have not encountered any problems.
I can also cite this new office as an example. We had to wait 90 days for the office to be ready and spent more than Dh500,000 for the fit-outs. If 10 per cent of all offices are fitted out, that would be good at this point. But I don’t think it has reached 10 per cent of the total supply. We need to offer office tenants more choices than just shell and core and we need to come up with new ideas.
• What are your thoughts about the proposed strata law in Abu Dhabi?
The government always looks to protect the market. I’m sure Abu Dhabi has taken into consideration all possible issues that have affected property markets in the UAE in the past when drafting the new law. The government will surely look for what’s good for this country and for its people.
• If you were to buy property in Abu Dhabi, where would it be?
I like Saadiyat Island. It is a very attractive area with the sea, the type of the investments available and the atmosphere.
• Your thoughts on affordable housing?
Actually, in the beginning of 2006, most developers were building 20-, 30-, 40-floor towers and catered to a limited range of customers. But we are a community here and we need to have more variety. So affordable housing is really important. If I can buy my own home, why should I spend my money on a lease?
Source: Jobannie Tabada, Features Editor, Property Weekly