A safe course amid the property storm

The Life: Shahab Lufti, the founder and chief executive of H&H Investments and Development in Dubai, talks about how the property company had to adapt to survive the downturn in the market.

Shahab Lutfi is the founder and chief executive of H&H Investment and Development. Jeff Topping / The National

Shahab Lutfi is the founder and chief executive of H&H Investment and Development, which describes itself as a "boutique" Dubai property company and has just announced that it is working on the development of the Four Seasons hotel in the emirate. Mr Lutfi explains that his company has survived the property crisis in part by adapting and moving away from the extravagance of 2008, when its plans included developing a luxury villa resort on the man-made World islands off Dubai.

How did the company start out?

The company was set up in late 2007, early 2008, almost a year before the crisis hit Dubai. Development was the most important thing in Dubai in those days. It was the sector that was booming. We were lucky that we had a couple of good clients that came on board immediately.

So you do not invest in the projects?

We are actually a development manager. We don't invest in any of our projects. We manage the whole project as if we're the owner; we just don't put any money in. That actually helped us during the boom. There were a lot of people who wanted to get into development and they didn't know what [to] do - how to manage it, which contractor to bring in, which consultant, so we filled in the gap. Your risk is just your current fees that you're charging the client.

What kind of losses did your investors see?

Our first project did not actually incur any losses. We delivered the O14 project [office development], and the investor was very happy and made a good return because we managed to sell most of the units that we had in the good market before the downturn. We also had a very nice project on The World. While we were going on in the design process, we actually recommended to our clients and investors to suspend the project because we didn't see much light.

Which island was it and what were the plans?

It was north of Russia. We were planning to develop villas that are managed by a hotel operator. The villas were supposed to be sold and then given back to the hotel to manage and lease out. We even did pre-sales. We sold 20 per cent of the island, but then we refunded all the buyers back. It's on hold. I think it's still too early to develop much on The World on that scale.

How did you survive the downturn in the property market?

We had to change our strategy. We were only a developer. We downsized drastically and we managed to control our overheads. We added services, which is property managing and leasing. Then we added other smaller services: we have an interior-design division and a facilities-management division. Now we're actually larger than we were before the crisis.

What projects do you have coming up?

We are looking into other hotel projects in Dubai - maybe somewhere on the Palm. There is an appetite from our Asia-based investors, from Hong Kong and Singapore, to actually own a hotel in Dubai.

* Rebecca Bundhun