- Broker Directory
- My Tools
- News & Advice
- Market Trends
- Other GN Sites
There is no such thing as a good — or bad — time to enter the real estate business. A Dubai-based trading group has chosen the present — seen as an increasingly more difficult environment — to get its first exposure in property development and launching a property brokerage operation.
The Time Machine Group (TMG) — which is also into retail through its 'Big Brands' stores — has put up Dh100 million to revive a stalled project in Business Bay. ''There was a joint venture that we have bought into, with our funds being used to rework the entire project,'' said Prakash J. Bhojwani, President and CEO of TMG. ''The project had semi-stalled over a slowing cash flow situation. When we looked at the project, the location was something that really grabbed our attention.
''There's still value to be had from gaining exposures in the right locations within Dubai. The new financing will be utilized for better value engineering, more space utilisation and new look that comes along with it.''
Some of the units at the high-rise are still unsold — but Bhojwani is no tearing hurry to do so either. ''I believe there's better premium to be had on the pricing down the line, and not by selling immediately. We will wait until the end of the year to assess our position,'' he added.
''It's a misconception to assume that the Dubai realty market has gone completely soft. There are perceptions and then you have the reality — the gap is quite wide.'' (TMG is also doing due diligence on another Business Bay project, this one a greenfield venture.)
The trend of bringing in strategic investors into a project is not new in Dubai — many delayed — and even shelved — projects got revived as market sentiments turned upbeat from mid-2013 onwards. The Real Estate Regulatory Agency also provided the impetus in clearing the backlog of affected projects. Such deals were brokered for projects in Silicon Oasis and Sports City, as well as elsewhere in the city.
But once the market started moving through a markedly slow transaction phase, tapping strategic investors has become more difficult.
Meanwhile, even as it launches its development interests, TMG has already made the move into setting up a brokerage arm. Again, the timing may seem odd, with transactional activity having dried up significantly in Dubai and impacting on local estate agencies. Through the first-half the year, a few had to close down.
''The market keeps hearing about more such closures in store for brokerages, and there is speculation swirling around another two in particular,'' said Bhojwani. ''But with our brokerage arm, which we launched just six months ago, the plan is to provide a broader portfolio management and advisory for our client base.
''Volume businesses are not what we are after — our average ticket sizes would be Dh1.5 million and over. These are enough to derive healthy fee-based income for ourselves. In these six months, we managed to do at least one good ticket sized deal a week. We are reaching a point where revenues from this are starting to provide a nice platform.''
Check out West Yas launched by Aldar Properties
Source: Manoj Nair, Associate Editor, gulfnews.com