Dubai: Launch a company … sell it … and now get back to relaunching the same company. Ranjeet Chavan of SPF Realty is doing just that.
It was in 2018 that the company was acquired by Gulf Sotheby’s UAE operations as part of the latter’s move to expand its reach among high net worth Indian and other South Asian real estate investors. But now, with the property market here going through a sharp correction, there has been a rethink.
“Gulf Sotheby’s was planning to bring down the size of its local office, and that brought us to thinking again about reviving the SPF Realty brand,” said Chavan. “It was in August we took up the discussions with them and we were able to agree on the exit agreement within a few weeks.
“It’s been an amicable process right through — the merger had brought value to both sides. For SPF it meant gaining international exposure through the Sotheby’s network.”
Plan of action
The coming weeks will see Chavan build a sales team. In this, he has been joined by another of the original three SPF Realty founders — Kalpesh Sampat. (Sampat had also joined Gulf Sotheby’s, as managing partner.) “I think we can do equally well the second time round — it’s been only two years since the SPF name has been absent,” said Chavan. “By year end, we should be in a position to get into projects on an exclusive basis. There will also be opportunities we will explore in the secondary market.
“It’s all subjective whether prices in Dubai real estate can go down further. Transactions are happening even now, and these represent real opportunities for us. We know the game.” (In a nod to the past, SPF has also leased space at the same building where it had been operating between 2006 to 2018.)
In the recent past, UAE’s real estate space had seen some high-profile deal-making involving consultancies/estate agents. There was the Savills buyout of Cluttons, to leverage the latter’s Gulf and Egypt exposure developed over the decades. More recently, the Warren Buffett-owned Berkshire Hathaway’s brokerage arm struck an alliance with Gulf Properties.
But a “de-merger” is a relative rarity — “Some form of consolidation is happening in all the major sectors — banks, FMCG, etc,” said Chavan. “There are too many brokerages in business in Dubai … it’s a number that’s way too high.
“But with SPF, it’s a return to a space that we know only too well.”
With a full sales team in place, the brokerage is aiming to do Dh750 million worth of sales in the first 12 months of relaunch. The focus will remain on tapping inward investments into this market, preferably in the premium end of the property ladder.
“The question is “Are we seeing the bottom”? Or should that be we are still closing in on it,” Chavan added. “But on one point I do not have any doubts — the market will see a turnaround and a return to new peaks at some point.”
Will the off-plan launch space rev up?
In the year-to-date, off-plan launches by Dubai developers have been limited as they tried to reach some balance between demand and fresh supply. Even at last month’s Cityscape, there was only one new launch as such. Instead, developers preferred to spend their time and dirhams on mopping up buyers for units they had already released.
It is unlikely that the next few weeks up to the year-end will suddenly see a spike in launches. More likely, developers will try to take their cues from further government measures to spur demand.
This is the reality brokerage firms will have to operate in. “Deals will still happen whether there are new launches or not,” said Ranjeet Chavan of SPF Realty. “We will just need to find a buyer and seller who can agree on the price … and that’s where we come in.”