In less than a year in the UAE real estate industry, Tamleek Real Estate has been doing rather well, selling more than Dh2 billion worth of property within six months and winning a Forbes Middle East award as the Arab World’s number one Investment Advisory and Brokerage Company. Brian Etemad, a seasoned US lawyer and former Emaar executive who is currently the CEO Tamleek, talks to PW about the company’s successful debut and his views on personal wealth, charity and post-handover payment plans.
With the market lingering on the downward curve, how did you manage to set up successfully?
We’re an investment advisory first and brokerage second, not a selling entity. By that I mean we wouldn’t tell someone to invest in a project we don’t believe in. From every three or four projects that we’re approached to sell, we only choose one. That’s why we have loyal investors who value my honest opinion. Dubai is small, the VIPs all know each other; word of mouth is our number one promoter. In addition, our developer partners are so loyal to us they send potential customers to us, instead of trying to sell to them directly.
The number one issue of brokerages is to get leads. Our issue is that we have so many we need more people to take care of those leads. We have 160 employees and will grow to approximately 400 by the end of this year. We do well because each of our sales staff sold at least one unit a day when we opened in April. I pay double the salary, cherry pick the staff and put the profits back into the company.
To win the Forbes award, we showed absolute transparency. They spent days watching us working in our office.
Where do you plan to take Tamleek?
My vision is to make Tamleek number one, to become a global entity within five years. I don’t care if I sometimes lose money as my overheads are so high. We have so many exclusivities that we still make profit as well — not millions but good profit. I have no attachment to money; 70 per cent of the share that I take as CEO of the company goes to charity, in particular to support orphans. All you need is to cover your medical, food, be able to travel and have a roof over your head. We all live better than 90 per cent of the population, and above all take love for granted.
By the last quarter this year, we will have offices in Dubai, Riyadh, Kuwait City, Qatar, Monaco and Mumbai. In China we’re collaborating with an agent, who rules the market there.
Why the choice of these countries and what about the rest of the world?
Our number one investor is Saudi Arabia, followed by India and Pakistan — the latter can be served by our India office. I don’t want to open too many offices as it becomes difficult to control. [We will do roadshows in] the GCC, China and Europe, as well as in other countries such as Australia.
They’re all coming to Dubai, why?
I was a lawyer in the US, but was also good at buying stocks. I always asked about the certainty that the stock would go up. Transferring this to real estate, today there is a lot of uncertainty regarding the UK Brexit, world safety, etc. Dubai offers a safe haven fiscally and security wise, with a strong UAE leadership giving certainty.
As a lawyer, do you feel Dubai could add more real estate laws?
They made the laws stringent enough not to stop investment, but to stop overnight flippers. They are also always coming up with new initiatives to support the market, such as a developer rating system. People now do due diligence to invest in good developers, and the Real Estate Regulatory Agency looks at several factors, not just sales numbers, but things such as the completion date are very important to them.
You mention Brexit. To what extent is it affecting your sales here?
I believe this last quarter will shock the world. GCC nationals, Indians, Chinese and individuals who used to live in the UK will move here, because of uncertainty there. Everyone is moving out of London. Leaving the EU was a big mistake.
Ok, but why Dubai? Why not Monaco, for example, which is closer to Europe?
There is nothing to do in Monaco, so the natural choice is Dubai or the UAE as a safe haven. For example, the British come to visit, get a taste [of the lifestyle] and decide to move here.
Europe in general is not an alternative. People are scared of terrorism, there is anxiety among those living and investing there. Dubai has been smart in saying we welcome you.
In addition, in the fourth quarter this year, companies are closing the books and are more generous with buyers wanting to buy stock. Price points and payment plans make it easy to do that right now. You will see unit prices and rental yields higher from today’s level.
I will raise the prices of the projects we’re selling by 10-30 percent.
Which projects are you recommending?
Al Habtoor City is extremely unique in terms of lifestyle and entertainment. Hotels such as W offer the best nightspots and shisha cafés in town and the Franco Dragone show. It is the first on the Dubai Water Canal, close to Downtown Dubai and with a tennis academy and the largest swimming pool in the GCC. It will be ready latest next summer and is ideal for families as well as singles.
In addition, Khalaf Al Habtoor himself loves his projects. I tour the City with him every Saturday.
The project doesn’t come cheap?
No, it is a glamorous project, but people love it. We have sold over 70 per cent already and will sell the rest by year-end. We’re offering units in the Residence Collection, starting at Dh1.5 million. We sold one penthouse for Dh110 million to a GCC gentleman.
The new Kempinski Residences in Business Bay fall into a similar category?
Yes, [units there] also start at Dh1.5 million, but its a different kind of project, fully furnished and serviced catering for investors. It offers chic elegance and glamour, with the option to choose from different colour tones. Kempinski at Mall of the Emirates boasts 70-80 per cent occupancy during the low season, so they should be able to rent it out via the rental pool.
We started selling this project even before the launch, as sentiment is so high. There are 800 units in total with 85 per cent facing the Burj Khalifa. There are pool decks on the upper apartments and Jacuzzi on the balconies, all designed slightly differently making the building look a bit wave-like. There are also five pools, food and beverage and a kids’ adventure land.
Like Al Habtoor, this developer Gemstone has a very strong backing. We always look at the developer: is it strong? Clients would come to me to complain not the developer. Gemstone is part of the Al Rajhi Holding Group, owned by Al Rajhi, who they call “Sheikh”. A multibillionaire, he doesn’t need the money, that’s why I believe in this building.
What other projects are you selling?
The Al Manazil Global Property Development’s Adagio in Sharjah, a hotel and residence with a guaranteed 6 per cent return in investment, and Terhab Hotel and Towers in Jumeirah Village Triangle.
We also back Emaar’s projects — the name sells by itself — with such projects as Creek Horizon in Dubai Creek Harbour, Act One and Two at Dubai Opera handing over in one and a half years at the latest. Emaar’s Fairview Vistas plots in Dubai Hills, which will be like Emirates Hills on steroids, are almost sold out.
Emaar will give you six options for design and build it for you shell and core and you do as you wish inside. We sold them for Dh5 million per plot, plus construction cost.
We also support Dubai Properties projects, and sell Villa Lantana by the Tecom Group and Nshama’s Town Square.
It sounds like you have no need to engage in post-handover payment plans. What are your thoughts on this strategy?
Developers are taking a risk. In my view, we have a great product so why pay after handover. It’s a big mistake to postpone handover payments. Like in any relationship, investors are becoming spoilt; they will get used to it and then demand it, spoiling a robust market.
I disagree 100 per cent with this practice. If you can’t afford to buy the house then don’t do it. You’ll be highly leveraged and if something happens, you will default. You should live and buy within your means, whether you play on the stock market or buy a home. You should be able to pay it by handover.
