Cityscape 2021: Azizi Developments to spend $2.72bn on new projects in Dubai by 2025

The company plans to roll out 100 new projects and will consider an IPO in 2024, its chief executive says

Farhad Azizi, chief executive of Azizi Developments, at Cityscape Global. Pawan Singh / The National

Azizi Developments plans to spend at least Dh10 billion ($2.72bn) to develop 100 new projects over the next four years as it expects the UAE’s property market to continue to recover at a strong pace amid surging sales, the company’s chief executive said.

“Between 2022 to 2025, we are looking at launching another 100 projects, minimum,” Farhad Azizi told The National on Tuesday on the sidelines of Cityscape in Dubai. “First the construction starts and after six months or so sales [will] open. If the appetite is there, we could increase it.”

The developer has 10 plots in its land bank and is looking to acquire 90 more for its future portfolio expansion, and is in active talks with government-backed master developers including Nakheel, he said.

“We are easily looking at Dh10bn expense: Dh3bn would be land and another Dh7bn will be construction, infrastructure and other expenses,” Mr Azizi said. “We are shopping around” and it is not a “walk in the park”.

The areas in which Azizi Developments plans to buy land include MBR City, Healthcare City, Al Furjan, Studio City, Motor City, Jebel Ali, he said.

“Right now, we have between 70 and 75 projects under construction and under 30 delivered in Dubai," Mr Azizi said. “In 2025, we would easily deliver more than 100 projects.”

Azizi Developments is bullish on the continued recovery of the UAE’s property market from the pandemic-driven slowdown that disrupted business momentum and tipped the global economy into its worst recession since the 1930s. The market rebound picked up pace in the last quarter of 2020 and has only accelerated, the chief executive said.

“What has happened since then is that sales have gone up and beyond the pre-pandemic level; they have crossed 2016 and 2017 levels,” he said, without providing the value of sales.

The UAE’s property market has benefitted from fiscal and monetary measures introduced by the government and from residency options introduced to attract investors to the country.

“There have been so many positive things happening that have helped all the developers and other businesses,” Mr Azizi said.

“Hotels are packed and developers are launching new projects, so everybody is doing well.”

Azizi Developments, which has changed its operating model, now builds at least 20 per cent of a development before releasing units for sale to investors, as opposed to launching off-plan sales first and then starting construction.

What has happened since then is that sales have gone up and beyond the pre-pandemic level; it has crossed the 2016 and 2017 level

Farhad Azizi,
chief executive, Azizi Developments

“This formula has allowed us to focus on quality and timely delivery,” Mr Azizi said. “We find this scenario of ours more risky for us, but more comfortable for customers.”

This year, the developer has spent more than Dh6bn on launching and finishing construction on more than 30 projects in Dubai. It opened another 11 developments which had crossed the 20 per cent construction completion mark for sales to investors.

“All phases of Riviera [project] are under construction. None of the phases is sitting idle,” he said. “The money [Dh6bn] mostly went into Riviera … Creek View project and buildings in Furjan, which are now finished.”

The developer conducted its initial public offering readiness exercise with consultancy PricewaterhouseCoopers last year. It has put the IPO process on hold, however, and may look once more at going public in 2024.

“When the market is booming and Expo is happening, you would be really naive” to switch focus away from the market, Mr Azizi said.

The company plans to continue building its portfolio to achieve better valuations when it revisits its plans for an IPO, he added.