Dubai Properties to double Dh350b portfolio by 2011

Dubai: Dubai Properties, the real estate development arm of Dubai Holding, has expanded its portfolio significantly over the last few years to Dh350 billion in value.

However, its growing appetite for more will double its portfolio to Dh700 billion within the next few years, its top official said.

"From Dh350 billion now, we will double our portfolio in the next three years," Mohammad Bin Braik, chief executive of Dubai Properties, said in an exclusive interview.

"What is important to us is that we are creating value for Dubai, not just building towers and projects."

Dubai Properties recently revamped its corporate structure and announced the establishment of a new holding company - Dubai Properties Group (DPG) - consolidating all its current operations into distinct business units, and bringing them under one umbrella organisation.

The new group structure comprises six business units focusing on real estate verticals such as hospitality, property services, international investments, engineering and real estate development. Each entity will operate as a stand-alone business subsidiary within the DPG, individually accountable for the unit's management systems, strategic planning and business results.

Bin Braik, a former banker, is now responsible for realising the strategic vision of the company as it expands its portfolio of master developments.

He was involved in all aspects of the strategy development process for the organisation, including establishing key process indicators (KPI) and coordinating with divisional heads to set strategic and financial processes for Dubai Properties.

Prior to his role with Dubai Properties, he served as vice-president of Citibank, managing a $900 million business through a network of six branches in the UAE.

A UAE national, Mohammad has over 22 years experience in retail and investment banking, commercial banking and property development.

In an exclusive interview, he elaborated his company's future plans in re-shaping the landscape of Dubai. Excerpts:

Gulf News: What is your business model in creating value and wealth for Dubai?

Mohammad Bin Braik: We have a balanced approach. We are building rental units, creating business parks as well as project development on what we call built-to-sell.

We are looking at a good mix between rental units and freehold or built-to-sell units. It could be split equally and give us a firm footing in the real estate business.

This balanced portfolio helps us to maintain a sustainable business model that will be free from risks and shocks and we are very comfortable with this model.

Could you shed some lights on your recent projects and the delivery status?

We are currently handing over the keys of Jumeirah Beach Residence apartments to buyers. It is one of the largest single complexes with so many apartments. From day one it was not an easy task. However, we have still managed to deliver, with a slight delay due to factors that were not in our hand.

Besides, the Business Bay is well in progress and you can see some of the towers that are fast rising. We are completing the Executive Towers, a cluster of 11 towers on Shaikh Zayed Road.

How much has Dubai Properties invest in projects so far?

More or less, Dh65 billion, if you consider all the announced projects currently under development - including the Jumeirah Beach Residence, The Villa, The Business Bay, the Executive Towers and others.

How are you going to double the value of your portfolio within such a short time?

The value of properties is appreciating fast in every way. On top of that we have a number of projects that we will shortly announce that will significantly raise our portfolio.

The growth is not an issue for us. We can grow at any pace. However, the issue is in managing the growth and ensuring the timely delivery of projects and promises, so that the customers continue to trust us and stay with us.

Are you going to grow organically of through acquisition?

Organically. We are not looking at acquisition at the moment. Our plate is full. But if opportunities come, then we are going to look at them.

What are your plans to expand beyond Dubai or the UAE?

So far we have been concentrating on our home turf, where the market is very strong and we are expanding very fast. However, there is a strategic direction to become an international developer, to position ourselves as a robust company.

When and which market do you plan to enter first?

Soon. By September this year, we plan to enter India. We are looking at creating a subsidiary in India and start with projects in Mumbai and other metropolises where the demand for housing is growing.

We are serious about India and we believe in the Indian market.

In going international, we plan to join hands with our sister concerns within the Dubai Holding in planning and developing projects, such as the Jumeirah Group in hospitality and Tecom in developing business parks, etc. We will use the synergies that these organisations bring with their collective experience and expertise.

How long do you think the current property boom will continue?

I reckon the housing boom will continue till 2015-2020. I'm ready to take a bet on that.

What about rising property prices? In fact, with the slump in the US property market, US properties appear cheaper compared to Dubai. Don't you think this is unusual and will have a negative impact on the real estate market?

No. Dubai is moving like a developed economy. Therefore lifestyle and costs are going to be akin to developed markets.

A studio apartment used to cost Dh200,000 a few years ago and there were few takers. At that time it was expensive. Now, though the price has doubled, many people think it's cheap. Most apartments are sold out as soon as they are announced. There are many takers even with prices rising.

In fact, in many ways, real estate prices are cheaper. However, these are all relative.

There is a need for low-cost or affordable housing scheme to help solve the growing housing problem as those belonging to the middle income group is becoming marginalised, with the majority taking shelter in Sharjah. Large corporates like Dubai Properties could help solve this problem. Does the Dubai Properties plans to develop low-cost housing?

I wouldn't call them low-cost, but affordable housing. Yes, we have plans to build affordable housing for residents. We will make an announcement when we are ready. It is still in the planning stage. We are looking at developing 50,000 units. These affordable housing projects will be a mix of freehold and rental units. We have already built a sizeable housing project in Al Quoz area that will soon be offered on rent.