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With three decades of leasehold experience, wasl Asset Management Group now makes a big push into the freehold market with the announcement of a new creek-side project.
The decision to expand has been motivated by the semi-government entity’s responsibility to support Dubai’s real estate industry, says Hesham Abdullah Al Qassim, CEO of wasl.
“Dubai’s real estate sector is based on solid foundations,” says Al Qassim. “The city is growing to be a global destination for property investment, thanks to pre-emptive legislation by the government to ensure a high level of transparency and credibility.”
The occupancy rate of wasl’s leasehold properties has never dropped below 92 per cent, which Al Qassim
says serves as a vote of confidence for the company. He adds that wasl’s entry into the freehold arena will help boost confidence in the property market.
The company has been working since 2012 on its first freehold project, the Creek Heights complex, which is now ready for handover.
Located close to the Dubai Creek, the project has three components serviced by international hotel operator Hyatt, which shares a long and fruitful history with wasl.
First in Dubai
The project comprises the Hyatt Regency Dubai Creek Heights, which features an ultra-contemporary design and a small conference centre, and the Hyatt Regency Creek Heights Residences. The fully furnished luxury apartments are open for viewing and will go on sale on December 15.
Bridging the old and new communities of Dubai, Creek Heights is close to Dubai International Airport. Al Qassim says the project is also a first of its kind in Dubai.
“Never before has the city offered investors completed and fully furnished serviced apartments, with owners immediately able to move in when the contract is signed,” he says.
“We want to gain the customer’s trust that we can deliver the right product at the right price and with the best quality,” says Al Qassim. “At the same time, when we launch projects, we make sure that we have at least the basic infrastructure done before starting any sales.
“Our strength over the past 30 years has been in the leasing market, as a pioneer in that area. So whatever remains unsold [in our freehold projects] we’re going to retain and keep it for our cash flow.”
He adds: “It is not just about the investor buying. All the projects in our portfolio are only built if they make financial sense for us and the owner. It has to be the right product for us to hold, or if the market can absorb the product at a particular time, we’ll offer it for sale.”
Valued at Dh1.7 billion, the 2.2-million-sq-ft Hyatt Regency Creek Heights Residences rises 43 floors. It has more than 1,100 car parking spaces, four restaurants, two lounges, a spa, three gyms and two swimming pools. The project is marketed by wasl, in collaboration with some brokers.
Homeowners of the 405 apartments can also lease their units through Hyatt’s rental pool. In this case, the owner can occupy the unit for up to a week during peak seasons and two weeks during low seasons.
“Our rental pool arrangement is unique because a lot of other hotel apartment projects only allow a certain percentage of the apartments to go into the pool,” says Al Qassim. “In our project all of them are eligible.”
The units range from studios to three-bedroom apartments. There are also a few one- to four-bedroom loft apartments. Al Qassim did not reveal the prices of the properties, although he said they would reasonable.
“The project has been built following a feasibility study. Prices are based on a market study and we have our own matrix, which establishes the right return for the investor. We don’t want to just cash in; we want to create value and not encourage speculation in the market.”
Al Qassim also points out that wasl is in an excellent position to determine a more realistic and reasonable price.
“While the desired return on investment is whatever the property buyer has in his mind, we can establish the pulse of the market because we own more than 30,000 units all over Dubai. So we will be the first company to know about any movement in demand and supply, influencing our return on investment, which is guided by the rental price.”
Al Qassim says prices are mainly driven by supply-and-demand dynamics and that they cannot be capped.
“When demand is going down, we start to reduce the rental price. If demand goes up, we hike the rents within the Rera regulations.”
Al Qassim says wasl is optimistic of its prospects next year, based on realistic market estimates and on the market sentiment.
“To me every opinion on what the market will do has a limited time validity. Anything can happen. There are a lot of factors that affect the economy and the sector.”
Having said that, he points out that Dubai has successfully overcome the most difficult challenges in the realty market.
“I believe next year will be very stable. Dubai always surprises us with new ideas and new projects. As an economy we will have a downturn and an upturn, but I would say the UAE is the least affected by the negative events outside the country.”
All this underlines wasl’s enthusiasm to further expand its real estate portfolio, as Al Qassim says Dubai will need more housing units across all market segments.
“We are very bullish,” he beams. “Half of the people employed here in Dubai are living in other emirates. And these people will move when prices adjust.
“Many left during the crisis, yet our occupancy was still 93 per cent because there were also tenants who moved in from other emirates, creating a balance.”
Al Qassim says wasl will only build when the market demands it. As an example, he cites wasl’s Al Muhaisnah and Ras Al Khor properties, which offered affordable housing at the height of the past property boom, when prices were at their peak.
“It was immediately fully occupied,” he says of the affordable housing options. “It is one of our responsibilities to make sure families and individuals get the right product to suit their budget.”
The developer adopted the same strategy in its hospitality schemes when it said it would complete 19 three- and four-star hotels in the next three years. The properties are expected to be completed before 2017, which would make them eligible for a four-year exemption on the 10 per cent municipality fee in Dubai.
The Dubai Department of Tourism and Commerce Marketing had announced last year that three- and four-star hotels that have been granted construction permit between October 1 last year and December 31, 2017, could avail of the fee exemption.
“We already opened one of these hotels, Hyatt Place, this year and it is doing phenomenally well,” says Qassim. “We’re running at 80 per cent occupancy.”
The developer believes that it will do equally well on its new path to freehold.
“We intend to use land in strategic locations throughout the emirate to undertake more projects, ensuring the diversity of our portfolio in the freehold market in the coming years.”
Al Qassim also reveals that new master-planned, mixed-use freehold developments are already on the drawing board, although he declined to reveal other details, including its location.
“We will do some master-planned projects consisting of a variety of products, including retail, residential and offices, with a balanced percentage of the components. They are under design and once we’re convinced it’s the right time, we’re going to start work.
“We will have a variety of products from luxury to affordable to suit everyone.”
Source: Nicole Walter, Special to Property Weekly