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Build “niche” to overcome the slowdown in the rest of the realty market — this is what a Saudi-Qatari joint venture plans to do with the launch of 104 upscale apartments priced between Dh12 million to Dh50 million at the Palm. The ‘Alef Residences’ form part of a Dh2 billion mixed-use development that also includes the W Dubai — The Palm on the west crescent of the manmade island.
The developers — Saudi Arabia’s Al Sharq Group and Qatar’s Al Mana Global — are aiming for a completion in 18 months. The project — which is fully funded and currently 30 per cent complete — was conceived in 2011, but “With the shift in global market conditions there was a strategic decision to launch and start construction once there was some clarity in the market,” said Matthew Bate, Executive Manager of Al Sharq Investment. “During this period significant research took place to ensure we were to develop something very special for Dubai.
“It was at this stage — in early 2014 — that the joint venture was formed.” (The Qatari group has 51 per cent in the venture and Al Sharq Group holding the rest. The former also has extensive interests in the retail space, representing brands such as Hermes and Giorgio Armani in Qatar.)
The project takes up a 46,840 square metre plot. There will be a 475-metre beachfront. Individual units range between 4,800 to 15,000 square feet.
“Our sales strategy is somewhat different to the traditional model seen in Dubai,” said Bate. “Many projects — both regionally and internationally — launch in order to generate funding. Launches are based on a rendering of the development and some minor works commencing onsite.
“I think it is safe to say that for this type of niche product we are somewhat isolated from “typical” market conditions. We are reacting to the supply and demand of our market segment. We believe strongly that our homes offer something not seen in Dubai — or the region — resulting in not only providing highly desirable homes but solid investments for owners.”
The 104 units are spread across eight “mansions” and with two apartments to each floor.
In keeping with the nature of what is being attempted, the developer is not going in for a mass-market approach on the sales side. “Our strategy is very one-on-one... Our team will visit customers and spend time with them to decide which of the 104 unique homes best fit their needs. This is a time consuming process.
“The absorption rate we have estimated is very conservative — this is the benefit of having all funds in place.”
Through the year, residences on the Palm have seen their prices continue to hold up amidst the general softening of values elsewhere in Dubai. But market sources say that transactional activity for Palm homes have been flat. It could be that the Alef Residences sale could give the necessary lift through the rest of the year and early into the next.
The developer duo have plans to take the ‘Alef’ branding for future initiatives as well. “Our aspiration is for Alef to become an international brand,” said Bate. “We’ve commenced with property but we are considering other industry sectors too where we can launch the Arabic-born Alef lifestyle brand.”
Source: Manoj Nair, Associate Editor, gulfnews.com