The Dubai property market is rife with speculation, even before COVID-19 cast its dark shadows on regional and global economies. Sobha Realty sheds new light on the sector and the transformations it is undergoing
- Dubai is one of the safest places to live in and with a proactive government taking the right safety measures first
- Dubai has an existing (supply) market that even in the worst of times would be valued at AED 20bn annually
- Our exposure is about AED 5.5bn, and we have a target of AED 2bn in returns which we achieved last year
Sobha Realty is an international luxury real estate developer with developments and investments in the UAE, Oman, Brunei and India. Its latest development, Sobha Hartland is a luxurious freehold community spread across 8 million sqft in the heart of Dubai, situated in Mohammed Bin Rashid Al Maktoum City.
In an Exclusive with Ms. Jyotsna Hegde- Sobha Realty President, AMEinfo got a glimpse into the thinking of property investors and developers, Covid-19 being a major disrupter, and also looked at the health of the sector for the future.
First Question: Are you still building?
In a zoom interview from her Hartland home, we asked Ms. Hegde whether construction is ongoing, with all the social distancing measures, lockdowns and WFH directives.
“We have permissions to build. We do take all kinds of precautions and keep personnel safe at all times. These are extraordinary times and construction is witnessing a slowdown, but we have commitments,” started Ms. Hegde.
“This government has taken appropriate actions very early on, made sure that people who don’t need to be outside stay home, and have permitted certain sectors to operate so that life is not impacted in an extraordinary manner.”
According to Ms. Hegde, what is admirable about Dubai, comparing it to other parts of the world, is that despite its government aggressively fighting the Coronavirus, it spent extra efforts trying to maintain a certain sense of normalcy during uncertain times.
“Dubai is one of the safest places to live in and with a proactive government taking the right safety measures first, this will give confidence to current and future residents about the choice of where they want to live,” she said.
“I heard the country wants to test everyone, in addition to the 1 million people they have already tested for COVID-19. That’s amazing.”
The product that Sobha Realty is building is luxury, but it supplies units that cater to most segments of the market.
“We address middle, upper middle and luxury segments and apartment sales were the biggest share of our turnover over the last 5 years, but what I am seeing now, at least over the past 2 months, is demand for high end villas,” says Ms. Hegde.
In terms of supply, Dubai has an existing market that even in the worst of times would be valued at AED 20bn annually, according to Ms. Hegde, and for this she is quick to add: “I don’t think Dubai is oversupplied at all.”
“We don’t just cater to the UAE population. We supply to the rest of the world like China, India, Saudi, the entire GCC, the Middle East, Levant and the world at large. It’s a safe haven for everybody. Beautiful to live in with the best of infrastructure, and safety levels.”
Property sales transactions in Dubai hit an 11-year high in 2019, recording a growth of 20% compared to the previous year, as new government policies boosted the sector, according to Property Finder.
Total real estate transactions in Dubai reached 41,988 last year, which compared favorably with the 11,662 property sales transactions registered in the emirate in 2008 at the height of the global financial crisis.
“Real estate is cyclical, and there will always be times when demand is less or more, but if you manage your portfolio correctly and don’t over-expose in the market, or get overexcited, there is always a great opportunity in Dubai,” Ms. Hegde explained.
“In 2020, our exposure is about AED 5.5bn, and we have a target of AED 2bn in returns which we achieved last year.”
According to Ms. Hedge, the only thing that drives real estate is population increase.
“The more people, the more places to live in. Dubai’s government has introduced plenty of initiatives to make people come here.”
On 2 July 2019 the UAE Cabinet announced the relaxation of foreign ownership restrictions for 122 business activities and this followed the issuance of the new Foreign Direct Investment (FDI) Law in September 2018 to open up the UAE mainland market to foreign investors.
“I am looking at India and places like Bombay and Delhi which are over populated and where the infrastructure there is unable to handle demand of that size. People have to find a place where they can rely on infrastructure, medical facilities, and roads, while safety for the entire family is always top of mind.”
Like a good promoter that she is, Ms. Hegde said Sobha Hartland is the best place to buy in Dubai.
“I live here and I am one of my own customers. I put my money here, in the heart of the city and a stone’s throw away from all the commercial centers of Dubai. We are 10 min away from every major hotspot in the city. It’s a green community and a self-sufficient one with a choice of villas and apartments, schools, and other lifestyle destinations,” she said.
“It’s really an oasis with plenty of open space, unlike usually dense communities near the city.”
Covering 8 million sqft., Sobha Hartland will be developed over the next 5 years, and is currently 25% complete.
Corona: Remote working
The Sobha Realty staff are all working from home.
“I’m on zoom, attending meetings. It’s not that hard and is very convenient. This could become the way of the future. Not everybody needs to go to office to do work. You can work remotely and put less stress and get as much done if not more,” said Ms. Hegde.
“It’s effective and gets the same conversations going, while I am able to look at faces, watching expressions, and emotions.”
“Fears are real. As an organization the intent is to make sure that as few people as possible are affected. It is impossible to say we will be able to save everybody, but people will have to stay strong.”
Personally believing in the benefits of yoga and meditation, Ms. Hegde said this is a time when people need to take care of their physical and mental health to have a fighting chance against COVID-19 times.
“We need to keep all efforts on and expenses down. We will see improving conditions in the coming months, likely end of June. We are a reliable developer, a trusted brand and we uphold our values of quality across all aspects of our operations.” she said.
“I expect we get back to normalcy, albeit a new normal, by year end. The way we do business will change. Change is wonderful. Exciting,” said Ms. Hegde.
She added that a there is a huge push for the entire market to adopt new technology in development, and Sobha Realty’s architecture team, which is headed by a German team, continuously follows the latest trends and remains on track with delivering services and products that uphold the market demands and needs.
She said there were “paradigm shifts for development and real estate sectors.”
From virtual tours, to smart homes, drones, 3D printing and more, the market is moving into the future.
“We are all enjoying the ride and Sobha Realty is providing residents the ability to comfortably design their living quarters and lifestyles in the communities we build, with technology a click away.”
Source: Hadi Khatib, AME Info