Dubai: Omniyat Properties is taking a liking to hospitality. The developer’s strategy with its upcoming projects will be to have a strong hospitality element built into the offering.
The near term plan is for four projects, two of them being “enhancements” to the developer’s existing portfolio and two with brands that are yet to have a presence in Dubai.
“Hospitality is a major focus for Omniyat, it was there – we had one completed hotel - but not as strong as it is now,” said Mahdi Amjad, executive chairman and CEO. “On some of the older projects, we have gone back and enhanced it to add the hospitality angle.
“We are going to announce our hospitality portfolio with a mixture of bands from now to end 2014. We are considering one that, potentially, could be under our own brand and it might be a joint venture.
“There are very successful hotel brands in Dubai, a lot of hotels and we need much more. Omniyat will have to look into the operation side and see which brands we can bring - brands that have a global name but are not in Dubai yet.”
All of Dubai’s leading developers have in the last 12-18 months come out with hospitality-themed ventures, including serviced apartments. Business groups such as Landmark too have been making moves into this space with their own hotel brands (Citymax).
What explains this enhanced interest in the sector? “The recent trend towards change of use has been driven by an over development of strata offices during the market peak, which resulted in a large overhang of commercial accommodation in areas such as Business Bay,” said Mat Green, head of research and consultancy at CBRE Middle East. “Over the past two years a number of developers have looked towards the hospitality sector to offer an alternative to their original use, with hotel apartments being a popular conversion choice.
“2013 is already promising to be another stellar year for the sector with record passenger numbers travelling through Dubai International Airport and forecast visitor numbers of well over 10 million. The continued upturn in the hospitality market has encouraged a host of new hotel development launches, adding to the already hefty sum of 20,000 new keys and hotel apartments scheduled for completion by 2017.”
Omniyat, on its part, intends to fully leverage its existing land bank in Business Bay, with more than 60 per cent being within this master-development. Amjad is quite content with the status quo.
“Of course, the infrastructure and progress has been better now [at Business Bay] and we see huge opportunity in the future,” Amjad added. “We are constructing in Downtown, we are opposite the Dubai Mall with its 65 million visitors, we are opposite Burj Khalifa, we are on the Creek when the extension comes around. This is a phenomenal use of the Business Bay location and then again a central business district is a key area for all investors.”
All of its land assets are fully paid up, and that is another plus for the developer. “We all learn through the time to effectively treat real estate as a long term asset rather than a short term game and we always promote long term players to join us in our project portfolio,” said Amjad.
“Our strategy was we do not want to come into the market unless the projects are fully designed and under construction and then we announce it. We have learnt so much from history over the last five years.
“One of the key learnings was “Do not depend on off-plan sales” - you have to fund it heavily before you can more forward. Our internal target was to have 60-70 per cent project funding before actually launching.”
