Move into Dubai South and existing land bank elsewhere will keep it busy, says CEO
Dubai: The Dubai developer Deyaar is all set to crank up the pace of new project launches, including one at the strategically vital Dubai South master-development. This marks a studied shift from the strategy it had adopted for the better part of the last two years, when it focused on its ongoing projects.
“Dubai South is to be one of our major expansions, but that’s a joint venture with the master-developer,” said Saeed Mohammad Al Qatami, CEO. “But we have our own land bank at the Lagoons, Business Bay and Silicon Oasis, where we are in the design phase for new projects or awaiting final approvals.
“Our ongoing mixed-use Midtown development (located in Dubai Production City, formerly the IMPS enclave) will have new zones coming through. Hospitality always takes some time, and it could be next year before that’s launched.
“We have the land bank and we are working out ways to have the best use of them.”
Deyaar announced its equal joint venture with Dubai South in January. Why opt for a JV? According to Al Qatami, “It’s always good to have the master-developer on board. It creates the right degree of involvement and in terms of management.
“For Deyaar, it proves more economical given that we pitch in with the cost of construction but there is no need to put in investments on buying the land. “Emaar too has a JV at Dubai South, and that location is going to be central to our expansion plans. We see the city as going to that side eventually.”
The Deyaar-Dubai South partnership will be responsible for a 1.27 million square feet area, much of which will be given up for freehold. “The property mix is under discussion, but the early stages will have town houses and mid-rise buildings,” the CEO said.
The developer recently reported net profits of Dh218.9 million for 2016, a gain of 55 per cent. Revenues were Dh428.3 million, up 67 per cent on 2015, led by gains on The Atria (in Business Bay) and Montrose (in Al Barsha) projects. (The developer also has a good line on recurring income, retaining properties for itself within the recent set of projects.) “The numbers were satisfying — 2016 was stable and we recently managed to raise debt of Dh900 million at a competitive pricing for Al Barsha and Midtown work,” the CEO said. “It was in recognition of the cash flow that we have been generating. The new funds will be drawn down over the next two three years.
“At the two zones we launched sales in Midtown, we have touched the 70 per cent mark. There is still good response, especially for the smaller ticket properties. It’s what is happening elsewhere in the market as well.”
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