The Red Sea Development Company (TRSDC) is planning to sell luxury second homes on a new island as part of the second phase of the tourism project gradually begins to take shape.
About 800 residential units — a combination of villas and condos, in addition to hotels, a marina and a golf course — will be delivered, John Pagano, chief executive of the TRSDC, said in an interview on Monday on the sidelines of the Arabian Travel Market in Dubai.
“We're already moving into phase two of the Red Sea [project]. We've started on an island which is going to be a second home type of product,” he told The National. “That's been approved and we're moving forward with that.”
These high-end houses will go on sale “by 2023 or 2024", appealing to buyers from Saudi Arabia or the GCC looking for a second home that is relatively nearby and in a comparatively cooler climate, Mr Pagano added.
“[The] Saudis and the Saudi market will be a very strong market for us … we're offering something that nobody else really can offer,” he said.
“We control virtually all the islands on the Red Sea, so to be able to buy a real estate property on an island that is highly serviced. It's going to be a very unique proposition.
“This new project we will not start selling for another year or two because it's at the early design stages. The designs have been approved, now we're actually detailing the designs … you don't sell off-plan too far in advance.”
The Red Sea has summer temperatures that usually range between 30°C and 35°C, and second homes on the coast would be a short flight away for domestic or Gulf owners, he added.
“I see it as a great opportunity for the GCC market as well as Saudi Arabia to have a home that is relatively close: from Dubai, it is a two-hour flight, and you can be in beautiful turquoise water. It's very different to the Arabian Gulf, the water quality and colour — it's a very different experience,” Mr Pagano said.
The Covid-19 pandemic has spurred sales of second homes as the ability to work remotely, alongside incentives such as visas for digital nomads and a desire to travel after a period of confinement, has boosted demand for a home-from-home, Knight Frank’s 2021 Global Buyer Survey showed.
About 33 per cent of respondents said they are more likely to buy a second home as a result of the pandemic, up from 26 per cent in 2020. The enhancement of lifestyle and the desire for a retreat was the key reason cited by home buyers.
Nearly two thirds of buyers said when looking for a second home abroad that they would be influenced by the local government's handling of the Covid-19 crisis.
[The] Saudis and the Saudi market will be a very strong market for us ... we're offering something that nobody else really can offer
John Pagano,
chief executive of TRSDC
Laheq, the new island being developed by TRSDC primarily for second homes as part of its Red Sea tourism project, will feature 500 villas, 300 condos and 300 hotel rooms, Mr Pagano said.
“They'll be expensive, the market will ultimately decide what we can sell for, but look at what is happening in Dubai and that should be your clue,” he said. “We haven't settled on pricing yet.”
The level of interest from prospective home buyers for the residential units has been significant so far, Mr Pagano said.
“People are knocking on our door wanting to know when they can buy but we're keeping our powder dry for the moment,” he added.
“We're also getting a lot of investor interest from people wanting to invest in the hotel assets because, while we don't need the capital, the private sector wants to get involved and we're willing to work with them on a joint venture basis.”
Phase two of the Red Sea project will include the development of four to five additional islands, with TRSDC currently evaluating locations and types of experiences that will be complementary to phase one, with decisions to be made by the year-end.
The tourism destination's dedicated airport is “virtually done” on the airside and is in the process of obtaining a licence so it can be used later this year, he said.
“The lights are being installed right now on the runway.”
Phase one of the Red Sea project will be delivered by the end of 2023, while phase one of the Amalaa project will be completed by the end of 2024, according to Mr Pagano.
Together, the two projects are currently tendering contracts worth 7 billion Saudi riyals ($1.86bn) to 8bn riyals for hotels and infrastructure works, which will be awarded on an continuing basis, he said.
To date, about 800 contracts worth 25bn riyals have been awarded.
On average, 1bn riyals to 1.5bn riyals a month's worth of contracts need to be awarded for the projects to stay on track for completion, Mr Pagano said.
TRSDC, which last year signed nine management agreements with international hotel brands for the first phase of its luxury project, will announce three more such agreements in the pipeline this month, he said.
The company has had to adapt and explore different markets in the face of global supply chain bottlenecks, while inflation has translated into a 10 per cent cost increase, but this is a “blip” that it can absorb, Mr Pagano said.
The large-scale projects being developed by companies such as TRSDC are part of the kingdom's efforts to diversify its economy and cut its dependence on oil revenue. Development of non-oil sectors such as tourism are key planks of the kingdom's Vision 2030 economic transformation agenda.
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
How the UAE gratuity payment is calculated now
Employees leaving an organisation are entitled to an end-of-service gratuity after completing at least one year of service.
The tenure is calculated on the number of days worked and does not include lengthy leave periods, such as a sabbatical. If you have worked for a company between one and five years, you are paid 21 days of pay based on your final basic salary. After five years, however, you are entitled to 30 days of pay. The total lump sum you receive is based on the duration of your employment.
1. For those who have worked between one and five years, on a basic salary of Dh10,000 (calculation based on 30 days):
a. Dh10,000 ÷ 30 = Dh333.33. Your daily wage is Dh333.33
b. Dh333.33 x 21 = Dh7,000. So 21 days salary equates to Dh7,000 in gratuity entitlement for each year of service. Multiply this figure for every year of service up to five years.
2. For those who have worked more than five years
c. 333.33 x 30 = Dh10,000. So 30 days’ salary is Dh10,000 in gratuity entitlement for each year of service.
Note: The maximum figure cannot exceed two years total salary figure.
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What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
Day 1, Dubai Test: At a glance
Moment of the day Sadeera Samarawickrama set pulses racing with his strokeplay on his introduction to Test cricket. It reached a feverish peak when he stepped down the wicket and launched Yasir Shah, who many regard as the world’s leading spinner, back over his head for six. No matter that he was out soon after: it felt as though the future had arrived.
Stat of the day - 5 The last time Sri Lanka played a Test in Dubai – they won here in 2013 – they had four players in their XI who were known as wicketkeepers. This time they have gone one better. Each of Dinesh Chandimal, Kaushal Silva, Samarawickrama, Kusal Mendis, and Niroshan Dickwella – the nominated gloveman here – can keep wicket.
The verdict Sri Lanka want to make history by becoming the first team to beat Pakistan in a full Test series in the UAE. They could not have made a better start, first by winning the toss, then by scoring freely on an easy-paced pitch. The fact Yasir Shah found some turn on Day 1, too, will have interested their own spin bowlers.
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The specs: 2018 Renault Koleos
Price, base: From Dh77,900
Engine: 2.5L, in-line four-cylinder
Transmission: Continuously variable transmission
Power: 170hp @ 6,000rpm
Torque: 233Nm @ 4,000rpm
Fuel economy, combined: 8.3L / 100km
White hydrogen: Naturally occurring hydrogen
Chromite: Hard, metallic mineral containing iron oxide and chromium oxide
Ultramafic rocks: Dark-coloured rocks rich in magnesium or iron with very low silica content
Ophiolite: A section of the earth’s crust, which is oceanic in nature that has since been uplifted and exposed on land
Olivine: A commonly occurring magnesium iron silicate mineral that derives its name for its olive-green yellow-green colour
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
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The specs
Engine: 3.0-litre twin-turbo flat-six
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Transmission: 8-speed dual-clutch auto
Fuel consumption: 10.4L/100km
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Ibrahim's play list
Completed an electrical diploma at the Adnoc Technical Institute
Works as a public relations officer with Adnoc
Apart from the piano, he plays the accordion, oud and guitar
His favourite composer is Johann Sebastian Bach
Also enjoys listening to Mozart
Likes all genres of music including Arabic music and jazz
Enjoys rock groups Scorpions and Metallica
Other musicians he likes are Syrian-American pianist Malek Jandali and Lebanese oud player Rabih Abou Khalil
What are the GCSE grade equivalents?
- Grade 9 = above an A*
- Grade 8 = between grades A* and A
- Grade 7 = grade A
- Grade 6 = just above a grade B
- Grade 5 = between grades B and C
- Grade 4 = grade C
- Grade 3 = between grades D and E
- Grade 2 = between grades E and F
- Grade 1 = between grades F and G
Vidaamuyarchi
Director: Magizh Thirumeni
Stars: Ajith Kumar, Arjun Sarja, Trisha Krishnan, Regina Cassandra
Rating: 4/5
UK’s AI plan
- AI ambassadors such as MIT economist Simon Johnson, Monzo cofounder Tom Blomfield and Google DeepMind’s Raia Hadsell
- £10bn AI growth zone in South Wales to create 5,000 jobs
- £100m of government support for startups building AI hardware products
- £250m to train new AI models
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THE BIO
Bio Box
Role Model: Sheikh Zayed, God bless his soul
Favorite book: Zayed Biography of the leader
Favorite quote: To be or not to be, that is the question, from William Shakespeare's Hamlet
Favorite food: seafood
Favorite place to travel: Lebanon
Favorite movie: Braveheart
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Company profile
Date started: January, 2014
Founders: Mike Dawson, Varuna Singh, and Benita Rowe
Based: Dubai
Sector: Education technology
Size: Five employees
Investment: $100,000 from the ExpoLive Innovation Grant programme in 2018 and an initial $30,000 pre-seed investment from the Turn8 Accelerator in 2014. Most of the projects are government funded.
Partners/incubators: Turn8 Accelerator; In5 Innovation Centre; Expo Live Innovation Impact Grant Programme; Dubai Future Accelerators; FHI 360; VSO and Consult and Coach for a Cause (C3)
SPEC%20SHEET
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Yahya Al Ghassani's bio
Date of birth: April 18, 1998
Playing position: Winger
Clubs: 2015-2017 – Al Ahli Dubai; March-June 2018 – Paris FC; August – Al Wahda
MATCH INFO
New Zealand 176-8 (20 ovs)
England 155 (19.5 ovs)
New Zealand win by 21 runs
