Dubai: Dubai Real Estate Corporation (DREC) will look at acquiring assets for development and management within the emirate, as the property prices in certain areas are about to pick up, a top official said.
"We believe in the future, see good opportunities in the near to long-term and might look into assets for acquisition and development, if it makes economic sense," Hesham Abdullah Al Qasim, Vice-President and Chief Executive Officer of DREC, told Gulf News in an exclusive interview Monday.
Dubai has a large pool of residential and commercial properties that are currently at very attractive prices by any standards. These properties, in the long-term, could help investors give a solid return on investment once the property market fully rebounds. Some developers, in the days following the global recession undersold properties to ensure cashflow as buyers were hard to come by.
When asked if DREC would directly enter the market with that objective, Al Qasim said, DREC will not acquire companies. "No, we are not interested in acquiring real estate companies whether they are domestic inland or structured for freehold sales — that is not our core business," he added, DREC will focus on rental and leasehold market. "We do not have any plans to enter the freehold market — that's not part of our mandate."
The company, which has a diverse portfolio of assets including residential, commercial, tourism and industrial properties, is planning to develop a number of hotels for the budget segment.
"We are also expanding the Le Meridien Hotel with 200 rooms currently under development," Al Qasim said.
"As a company, we are studying the hospitality market which is the first to recover from the financial meltdown and we see demand coming back, especially, in the mid-market and budget segments. There is a shortage of branded three-star hotels in the market."
DREC has a residential portfolio of 25,000 housing units currently being managed by its asset management arm, Wasl Properties, with an occupancy rate ranging 92-93 per cent. The company has delivered about 5,000 units during the last 3-4 years and has a few hundred units currently under development.
Al Qasim said, DREC has done well even in economic downturn. "While a lot of other developers and companies' operations shrunk, we grew our portfolio and our rental income also has gone up. This is a phenomenon and reaction seen and reported on globally to these kinds of circumstances in all urban business centres like ours.
"We are a solid company and ready to play a strong role in the economy of Dubai."
Dubai Government has amended the law that helped set up DREC in 2007, bringing it under the direct control of the Ruler's Court, giving it a wider mandate to expand its portfolio and achieve greater financial independence.
The company, which inherited a large pool of government housing assets when formed in 2007, is looking at rationalising rents across its portfolio. "We are following the rent index of the Real Estate Regulatory Agency (RERA).
The company has a solid cash flow coming from rents and lease contracts across its assets — part of which is re-invested in new projects.
Al Qasim said, in terms of portfolio size, DREC is the largest real estate company in the emirate. In addition to the residential portfolio, it owns a large pool of luxury hotels including the Hyatt Regency, Park Hyatt, Grand Hyatt, Le Meridien Dubai, Le Royal Meridien, Le Meridien Mina Seyahi, Westin Dubai hotel and Dubai Golf which runs Dubai Creek Golf Club and Emirates Golf Club. It also has 5,000 industrial plots under management.
He said, following the economic recession, Dubai is back on a growth mode.
"The economy is back on growth track and we see market picking up. We have witnessed a steady growth and we look forward to a better growth track going forward."