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With investments in the UAE real estate and hospitality sectors totaling $300 million (Dh1.1 billion), Azizi Investments is only getting started with its projects in the UAE. The company plans to invest $500 million more in residential and hospitality projects. Spearheaded by its real estate development arm, Azizi Developments, the company aims to deliver more than 3,500 residential units in Dubai by 2020.
Azizi Investments, a business arm of Azizi Group, which was established in Afghanistan in 1989, started venturing in the UAE real estate market with in a residential project in Al Furjan, a master development by Nakheel in Jebel Ali. The company also has various hospitality projects at the planning stage, including a five-star luxury hotel chain and hotel apartments in Healthcare City and the Palm Jumeirah. The company said it aim at least 1,000 keys by 2020, representing 4 per cent of the UAE hospitality sector market share.
The group also has interests in banking and finance, oil and gas, hospitality and tourism, real estate construction and development, and has been actively involved in various developments in Afghanistan since 2002, with total investments crossing $1 billion.
PW speaks to Farhad Azizi, CEO of Azizi Developments, about its various projects, particularly its soon-to-be-released units in Al Furjan.
Tell us about your project in Al Furjan.
Al Furjan is progressing well as a residential community. It will also have a town centre to be built by Nakheel. Metro connectivity to the community has also been recently announced. With its location close to the new airport and the World Expo site, we are seeing a lot of interest in the area.
We bought plots there in 2007-08 but held off construction for a few years. There are eight buildings in total where we are offering one-, two- and three-bedroom apartments. These are targeted towards the middle to upper middle-income group.
What is the timeline of your projects?
For our Al Furjan projects, the first set of deliveries is targeted for this or next month, with five buildings offering approximately 536 apartments. This will be our first delivered project in Dubai. The remaining three buildings with 330 apartments are scheduled to be delivered in December. We have also recently contracted KCC to build two more projects in Al Furjan. These will be hotel apartments.
What would you say is the unique selling point of your projects in Al Furjan?
Given our presence in this region through banking and oil and gas operations, we were well aware of the housing needs of the residents. Our main focus is on being transparent with customers, so we don’t over promise and under deliver. Most of the sales so far have happened through word of mouth and that speaks for our commitment to make buyers comfortable.
We encourage people to visit the construction site, see the status of work for themselves and then buy. A lot of people buying our Al Furjan properties are end users, families, and that has been a positive factor in how we feel the community will be built when people move in. We have also offered special refunds in some cases if a buyer’s loan application was rejected. The idea with all our projects is to remain customer focused.
You are coming up with luxury residences on the Palm Jumeirah. Tell us about the project.
The Royal Bay project on the Palm Jumeirah is our flagship luxury project and is coming up in one of the few remaining development sites in that location. We’re offering 90 units, of which 45 are already booked. There is a choice of one- or two-bedroom apartments and two pent houses. This is a G+9 development with private beach access and a view of the sea from every room. It is a very lucrative opportunity for investment. We will announce delivery dates soon.
How did your fare last year and what are your expectations this year?
We started selling our Al Furjan properties in January last year and the initial months were slow. But there has been a month-on-month improvement in sales. From selling around 17 apartments per month initially, we moved to almost 65 per month by the end of the year. As of middle of January, we have sold 38 apartments in Al Furjan and five floors (45 units) have been booked at Palm Jumeirah.
We foresee 2016 to be the year of competition with many developments around the city. This is a healthy sign as only the ones with strong fundamentals will stay in the long run. Speculators have been moving out of this market with the new regulations and we see more of that happening this year, which again is positive.
What is the business model being followed by your company?
Our strategy has been to buy land and make the payment in full before we commence construction. We incur construction costs and take the project up to about 20 per cent in the construction stage before launching it in the market. Thereafter, our payment plans are typically 30 per cent during construction and 70 per cent after handover. That has been very flexible for most buyers as they can get financing easily from banks for the payment. For the Palm Jumeirah project, the payment plan is 20 per cent during construction and 80 per cent during handover.
Which other areas in the UAE are you looking for new projects?
We have plots in Healthcare City in Dubai, and some in Ajman. We will begin working on those soon. We are also keen to shortlist plots in Downtown Dubai and are waiting to finalise the details for those. Dubai Sports City is also a possible location for our projects in future. Abu Dhabi is also on our radar and we are currently studying the market to finalise some locations.
Your first two projects at Al Furjan and the Palm Jumeirah are residential. Would you be looking to develop other categories of real estate?
Our company has previously delivered several construction projects such as malls, offices, even infrastructure projects such as storage facilities, sewage systems for cities and a metro line between Uzbekistan and Afghanistan. We have also built schools. We are keen to develop office projects in Dubai. We were earlier looking for land next to Dragon Mart for a commercial project, but that is now off the market and already under development by Nakheel. We haven’t begun working on commercial projects, but we’re looking for the right opportunities.
There has been a lot of discussion on the issue of affordable housing. Is that something you are looking to develop in future?
We are certainly keen to offer homes for this segment. At the moment our one-bedroom units in Al Furjan have prices ranging from Dh890-Dh990 per square foot, which many buyers will find affordable. In future we are looking to develop projects catering to this segment in Dubai Sports City and in Ajman.
Are you looking to expand outside the UAE?
As a company headquartered in Dubai, there is a lot of interest in overseas locations that want to replicate the Dubai model. They understand the capabilities of a company that is operating in this market. We have already tested the waters in Germany, where we developed a small number of plots. There will be more developments coming up there in future. Canada is another location where we foresee a strong potential. With only six banks operating in the country, which are monitored strongly, we feel the stability offered their ties in well with our business ethics and future growth plans.
Azizi launches Royal Bay
Azizi Developments has launched Royal Bay Residence, a collection of 90 fully serviced luxury residential apartments on the crescent of the Palm Jumeirah, next to Anantara Hotel. The new project is part of the company’s Dh4.5-billion development plan to build thousands of flats in Al Furjan and on the Palm Jumeirah.
Apartment sizes range from 802 sq ft to 1,638 sq ft and prices start at around Dh2.2 million and go up to Dh4.5 million. The project also offers buyers to pay 80 per cent only upon handover. With a plot area spanning 4,787 sq m and built-up area of 11,246 sq m, the development offers a choice of 58 one-bedroom and 30 two-bedroom units spread over eight floors, and two penthouses located on the ninth floor with private pool and Jacuzzi. Construction of the Dh350-million project is expected to be completed by March next year.
“We are in a very healthy phase of the property cycle,” says Farhad Azizi, CEO of Azizi Developments. “The next few months [will see] market stabilisation and the economy is going to recover very fast by mid next year. These are good times to invest in a good location and property and capitalise on quick price appreciation. Royal Bay is one of the last few developments at the crescent on Palm Jumeirah.”
Source: Manika Dhama, Special to Property Weekly