Dubai: One of the biggest Indian-owned businesses in the wider Gulf, the R.P. (Ravi Pillai) Group plans to deploy $1.5 billion (Dh5.5 billion) on real estate development in Dubai, with two projects in Business Bay and another at Downtown. It is the first time the $3 billion plus entity is getting into realty in these markets, with general and industrial construction having been its core focus until now.
Acquiring the plots came to a “few hundred millions of dirhams”, according to a top official. The Group is targeting real estate as contributing 10 per cent of overall turnover before the end of the decade. During this period, group turnover is projected to grow at between 5-10 per cent, according to the founder and chairman, Dr Ravi Pillai in a telephone interview from Bahrain where the Group is headquartered.
The 3 million square feet project will have serviced apartments, residences and a dedicated retail precinct as well as a five-star hotel. Others include a five-star hotel in Dubai Marina to be operated by Crowne Plaza, a four-star hotel in Bur Dubai to be managed by India’s ITC Group; and a serviced apartment complex near Downtown Dubai.
In India, the Group has in the recent past built up a property portfolio, but principally in hospitality and through management contracts with Leela Group and ITC Hotels.
“Our preference is for the mixed-use in Business Bay and Downtown as that’s what buyers are willing to pay for immediately,” said Pillai. “The market is geared to filling all the needs the Expo 2020 will throw up and for a new player it eases our point of entry.”
Range of products
The Group has another in-built advantage it wants to deploy — that of owning an in-house construction firm, Gulf Asia Contracting. “Construction is where the Group made its mark and over the years Gulf Asia has acquired the technical knowhow on a range of projects, including infrastructure,” said Pillai.
“It would not make any sense not to tap Gulf Asia’s resources for our own development purposes. We have ready resources on tap to mobilise and complete the project in time. It also means significant cost savings all the way through.”
The Group could consider basing its corporate headquarters in Dubai in the future, the chairman said.
“In 2014, the focus of our expansion programmes is to further strengthen our footprint both in oil and gas and non-oil sectors, effectively partnering with the growth strategy of the regional governments,” said Pillai. “This is reflected in our developments in Dubai, which is further investing in the hospitality sector as part of the preparation to host Expo 2020.”
Master-development
Mixing hospitality and residential projects has been what Dubai’s leading developers are intent on doing. Nakheel recently confirmed plans to add to its hotel collection, particularly at the “Deira” master-development.
Damac Properties’ flagship hotel/serviced apartment project, Damac Maison near The Dubai Mall, is going through its paces post the soft opening. “It’s a fact that in the medium-term our project priorities are geared towards serviced apartments — even before the confirmation of the Expo 2020 the projected number of new hotel rooms were inadequate to meet projected demand,” said Ziad Al Chaar, managing director at Damac. “Expo 2020 confirmation requires a substantial new capacity creation.”
