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With more than 80 per cent of units sold at the luxury high-rise in Reem Island, the MAG Group confirmed it will be looking out for ''ready projects'' in Abu Dhabi. It was recently that the Group, which has a sizeable portfolio of completed and ongoing projects in Dubai, took its first exposure in Abu Dhabi by acquiring the B2 high-rise for Dh550 million in alliance with another investor group. (It has since been renamed as MAG 5.)
''If need be, we will finance any such acquisitions from our dedicated family-managed fund of Dh1 billion,'' said Talal Al Gaddah, CEO of MAG Property Development. ''We had initially planned on creating a rental asset base from the units at the D2 because yields could be in the 10-12 per cent range. At the time Abu Dhabi had just lifted the rent cap and that made acquiring an asset there a more compelling reason.
''But by the time the actual transaction was signed, we found the market for unit sales in Abu Dhabi was improving. With 80 per cent of the 200 plus units sold, we certainly got the timing right.'' (The units are priced upwards of Dh1,300 a square foot.)
The developer certainly has had its share of good breaks in the recent past. When it acquired a plot in Meydan, the plan was to use it for a project where per square foot pricing would be around Dh1,000. ''At the time the market was still in the doldrums, and Meydan was yet to be the address it is today,'' said Al Gaddah. ''And suddenly the Dubai realty scene changed completely, Meydan's marketing efforts pushed it right up there among the most desired locations in the city. From that point onwards, anything at the Dh1,000 per square foot mark was never a possibility.''
Recently, it launched the Polo Residences and for which it has set a first quarter completion in 2017. A $40 million construction tender has just been awarded.
''From a design perspective, Dubai needs more green areas and we are keen to do whatever we can,'' said Al Gaddah. ''In my opinion, the ''stomach'' — or the already developed areas — of the city is too full of towers. We need the expanses of green that all of the great European cities have. And it can be done here in a cost-efficient way. This is what will attract a newer generation of buyers to buy and live here.''
Simultaneously, the developer is keeping its high-rise portfolio stacked, with the launch of multiple projects, including a super-premium MAG Luxury.
''In the next one year we will be keeping ourselves busy — there are 22 plots that we own and more could be acquired,'' said Al Gaddah. ''The Dubai World Central development looks good and we are keen on a project across one vast area — say of 3 million square feet.
''New locations are being created in Dubai by the master-developers. In these master-developments, 20 per cent of the infrastructure is tied up with water and power and is already available.
''But it is the other infrastructure — road networks, common areas, parks, etc — that needs to be there as well so that private developers can come in and do their bit. This way everybody wins.''
Read more about MAG who adds six more projects to its pipeline in Dubai
Source: Manoj Nair, Associate Editor, gulfnews.com