Dubai: The deals are not just happening with properties bought or sold in Dubai ... even brokerage firms are getting into the deal flow mode.
The One Broker Group — a coalition of five businesses formed to take on specific off-plan launches — has now decided it is best to go in for a full-fledged merger.
“The initial idea was to work in a manner whereby we utilise our collective strength and use it to our advantage in securing and selling key real estate developments in Dubai,” said Loai Al Fakir, Managing Partner in One Broker Group. “After being successful with the arrangement for over a year, we realised there is a lot of synergy among the owners and the agents.
“This is when we decided to streamline operations and become a single entity. Our vision was not to lower the cost of operation but a more efficient utilisation of resources.” (The five entities are Aurum, Provident, Elysian, Lanhill and Ottomans.)
This is the second major deal involving estate agencies in Dubai in recent times. Earlier in the week, Gulf Sotheby’s International Realty confirmed it had acquired SPF Realty, the combined entity becoming one of the biggest brokerage firms in the UAE.
Currently, OBG is outlining expansion plans for the individual divisions within it. There are four offices in Dubai and the medium-term strategy is to stretch the network to some of the other Gulf markets as well.
Al Fakir insists that the merger process came through without any pain inflicted by job losses. “We made it a point to not laying off any employee. Our strength is in the numbers — [of] having 200 plus agents and over 60 management and support staff. We are looking at growing over the next 18 months.
“At present, we have done a major restructuring of roles within the company and this was done to improve efficiency.”
There sure seems to be plenty of selling for the agents to do. OBG claims a pipeline of upcoming projects with a combined value of Dh4 billion. This includes the IGO 101, a ground plus 39 storey tower launched this week at JLT (Jumeirah Lake Towers). And earlier on, it was engaged in unit sales for the freehold designated tower at Al Habtoor City on Shaikh Zayed Road.
“We have a complete office dedicated to off-plan sales and remote sales offices for our exclusive developments,” said Al Fakir. “Providing sales and leasing services in different parts of the city is a major portion of income for us.
“There are developers who we provide a complete solution to — from securing a plot in a good location to the design and layout on that plot and later with the sales of the development.
Since the second-half of 2016, the rush of off-plan launches and sales happening in Dubai has kept estate agencies occupied. But it has not been a smooth ride for all, with even some of the bigger names from the past seeing a decline in their booking volumes. Some fared even worse, being forced to shutter operations.
Strong cash flow
Will the consolidation drive continue in the local market?
“Agencies are closing down all the time — this is nothing new,” said Al Fakir. “Companies that have the experience, with a strong cash flow and large network of clientele can flourish.
“The market right now is maturing and clients value the advice of the broker who is not tied to a single developer. Developers’ sales agent are one dimensional as they can only offer what that developer has.
“This will always give us an edge over the sales team of developers. And experience is a massive differentiating factor which is why they [agents] are able to have a more educated opinion when advising clients.”