Property | UAE

The real estate investors reaping the rewards

Dr B.R. Shetty and Rizwan Sajan explain why they have faith in UAE's property market

  • By Binesh Panicker, Property magazine
  • Published: 00:01 November 15, 2011
  • Property

Dr B.R. Shetty
  • Image Credit: Kishore Kumar/ANM
  • Dr B.R. Shetty owns the 100th and 141st floors in Burj Khalifa.
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There was a time when everybody wanted a slice of the property pie but, at the onset of the global financial downturn, investors put off their plans, wary of spending in such uncertain circumstances.

But there were a brave few who kept faith in the fundamentals of the property market throughout, and they are reaping the benefits today.

Property meets two men who stand out for their exceptional property choices and asked them what they think makes Dubai such a good location for investment.

Sky-high ambition

Dr B.R. Shetty's first taste of UAE property was in 1973, in a shared room in Abu Dhabi. He's come a long way since then and is now one of the top property investors in the country.

Owner of NMC Hospital and UAE Exchange, Shetty says he never lost faith in the Dubai property market. Taking a long-term approach to all of his investments, when recession lapped at the UAE shores, Shetty was completely unfazed.

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"When the market was booming, I would have only gained a notional profit, and similarly, I didn't lose anything when the market crashed," he says. "I am passionate about real estate. I bought the entire 100th floor of Burj Khalifa out of sheer passion. I wanted to be a part of this iconic development, the world's tallest building," says Shetty.

He recollects the day he was invited to Emaar Properties' sales office, where apartments at Burj Khalifa were being sold. "I waited for five hours in a queue and found that all except the 100th floor was sold out. I immediately bought this entire floor because, I believe, it is a prestigious address," he says, adding that even now he is being contacted by many prospective buyers for this property — although he is in no hurry to sell it. "I bought Burj Khalifa units at Dh3,000 per square foot and then it went up to Dh10,000 to Dh12,000 per square foot. But then the value came down again. Even now I can sell it for the price I bought at, but I am prepared to wait until I get good returns," he says. Shetty is now planning to use the three apartments on this floor as guest homes.

The first property Shetty invested in was on Palm Jumeirah - a five-bedroom villa where he spends his weekends. That was just the beginning. He now owns apartments in Dubai's World Trade Centre, Sky Tower and Tala Tower in Abu Dhabi. He also owns the 141st floor of the Burj Khalifa, where he plans to setup his corporate office for international businesses.

While he hasn't bought any property recently because he has been busy expanding his business worldwide, he says this is the best moment in a long time to buy property in Dubai. "At the current prices, your investment can't go wrong in a market like Dubai or Abu Dhabi," is his advice to people who have long-term plans for this country. 

Property playground

As the founder and chairman of Danube Building Materials, real estate is the playground of Rizwan Sajan. So, when it comes to investing in property, he hardly makes any mistakes.

Rizwan's first investment was in Jumeirah Beach Residence, at the time of its launch. He purchased two three-bedroom apartments facing the sea at Dh699,000 each. He sold these properties four years later at Dh2 million each. That inspired him to invest more in real estate and today he owns properties in Dubai and Ajman. "Whenever I buy property, I calculate the land price, the construction cost and how much I am paying for it. Not a single property that I have bought is more than Dh700 to Dh800 per square foot, because I feel the construction cost of a tower is not more than Dh400 to Dh500 per square foot and the land cost would be Dh100 to Dh200 per square foot. It has come down even more now."

Rizwan says he would not invest in a property if the developer demands Dh2,000 per square foot just because market prices are high at the time. "That's what saved us when the market crashed," he says.

He has rented out 90 per cent of the properties he bought in areas such as Dubai Marina, Burj Khalifa, Jumeirah Beach Residence, Emirates Living, Dubai Silicon Oasis, Dubai Investment Park, Green Community and in Ajman, where he has a few apartments in Corniche Tower. He claims that, despite some negative reports on the market, properties in Dubai in general give a return on investment (ROI) of 8 to 10 per cent. "There is no point in selling the properties I own as they are giving me a decent ROI of 6 to 7 per cent on an average," he says. In the past six months, property prices in prime locations have shown an increase of about 10 to 15 per cent, he adds.

Rizwan says, compared to property prices in his home country, India, Dubai properties are cheaper and have more value additions. "For example, the property prices in suburban Mumbai, where I come from, is in the range of Rs25,000 to Rs30,000 (Dh1,900 to Dh2,300). However, in a prime location such as Dubai Marina or JBR, you can buy a sea-facing unit for about Dh800 per square foot. How can this place go wrong?" he asks.

His piece of advice for people who are unsure whether to buy or not is, "Buy today because you will never get this chance again. Prices are at the bottom level and they can only go up."

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