Dubai developer Sobha Realty plans to build a $4 billion mixed-use project in the emirate as it taps into the continuing recovery in the UAE’s property market.
The project, spanning11 million square feet, will be built next to its current project Sobha Hartland in the MBR City, PNC Menon, founder and chairman of Sobha Realty, told The National in an interview at the Cityscape Global in Dubai.
“We are planning to have a large project close to Sobha Hartland and will be launching it some time in July next year,” Mr Menon said. “This is a big project and may take about six to eight years to complete.”
Sobha Hartland is an 8 million-square-foot project and was first announced in 2014. The master development is being built in phases and is expected to be complete by 2025.
The new project, named Hartland Sanctuary, will be financed through a mix of debt and equity, Mr Menon said. The company will also consider tapping bond markets to raise money to fund the project.
The launch comes as the UAE’s property market continues to rebound from the coronavirus pandemic on the back of government initiatives and the accelerated vaccination programme.
“We didn’t expect this (the market recovery),” Mr Menon said. “There was also pent-up demand because for two years it was slow and the government initiatives really helped the market to improve.”
The UAE government has rolled out a number of new initiatives to support the economy in the last year, including visas for expatriate retirees and remote workers, and the expansion of the 10-year golden visa programme to encourage foreign professionals to settle in the UAE.
The country also overhauled its commercial companies law last year to attract more foreign capital and annulled the requirement for onshore companies to have an Emirati shareholder.
Expo 2020 Dubai and the Dubai 2040 Urban Master Plan, which aim to make the city the world’s best to live in, are also expected to further boost its property market.
“Apart from the market (improvement), Dubai has become one of the top 10 cities to live in,” Mr Menon said. “People who are reasonably well to do, want to live here.”
Sobha has a target of more than $1bn in sales next year and the company is aiming for net sales worth $1bn by the end of 2021, according to Jyotsna Hegde, president of Sobha Realty.
“The bulk of our sales will come from customers in the GCC, India, China, Africa and Russia. A lot of customers from the US, Canada, Germany and France are also keen to buy the property. We are very positive about next year,” she said.
Residential transactions in Dubai hit an eight-year high in the first half of 2021 as demand for bigger homes increased amid the continuing recovery of the property market.
Total transactions in the six months to the end of June surged 69.2 per cent compared with the same period in 2020, according to CBRE Research.
Sobha Realty is also exploring new opportunities in Saudi Arabia, the Arab world’s largest economy, as well as in the UK.
“We have plans to start a new residential project in the UK in 2024. Saudi Arabia is also a potential market for us to expand,” Ms Hegde said, without divulging further details.
FIXTURES
Fixtures for Round 15 (all times UAE)
Friday
Inter Milan v AS Roma (11.45pm)
Saturday
Atalanta v Verona (6pm)
Udinese v Napoli (9pm)
Lazio v Juventus (11.45pm)
Sunday
Lecce v Genoa (3.30pm)
Sassuolo v Cagliari (6pm)
SPAL v Brescia (6pm)
Torino v Fiorentina (6pm)
Sampdoria v Parma (9pm)
Bologna v AC Milan (11.45pm)
Gender pay parity on track in the UAE
The UAE has a good record on gender pay parity, according to Mercer's Total Remuneration Study.
"In some of the lower levels of jobs women tend to be paid more than men, primarily because men are employed in blue collar jobs and women tend to be employed in white collar jobs which pay better," said Ted Raffoul, career products leader, Mena at Mercer. "I am yet to see a company in the UAE – particularly when you are looking at a blue chip multinationals or some of the bigger local companies – that actively discriminates when it comes to gender on pay."
Mr Raffoul said most gender issues are actually due to the cultural class, as the population is dominated by Asian and Arab cultures where men are generally expected to work and earn whereas women are meant to start a family.
"For that reason, we see a different gender gap. There are less women in senior roles because women tend to focus less on this but that’s not due to any companies having a policy penalising women for any reasons – it’s a cultural thing," he said.
As a result, Mr Raffoul said many companies in the UAE are coming up with benefit package programmes to help working mothers and the career development of women in general.
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From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
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.”
Name: Peter Dicce
Title: Assistant dean of students and director of athletics
Favourite sport: soccer
Favourite team: Bayern Munich
Favourite player: Franz Beckenbauer
Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates
Killing of Qassem Suleimani
