Dubai: He thrives where others fear to tread.
Samir Munshi, 35, scouts for stalled, incomplete projects in Dubai in a bid to turn them around and make windfall profits.
Relatively young and fearless, Munshi is one of the figures behind a surge in the number of Dubai developers seeking permission to restart stalled projects.
And he’s not even a developer — at least not yet.
Managing director of Dubai-based Orion Holdings, he has taken an unconventional route, snapping up “junk” properties and pumping cash to restart discontinued buildings.
Orion’s current portfolio includes over 500 Dubai units worth Dh800 million, mostly in stalled buildings. “We invested aggressively while fear still reigned in the hearts of people reeling from abandoned projects.”
So how does he make money?
Munshi waxes philosophical: “People are motivated either by fear or greed. Everybody got greedy in the years leading up to the 2008 crash. People had lost faith as many developers did not deliver on time -- or not at all.
They want to see something happening before they part with their money again. It’s a Catch 22 situation. Our decisions [to revive them] are based on sound fundamentals,” said Munshi.
So what’s fundamentally sound about incomplete buildings?
Munshi shares a wounded warrior’s insights, having started his career in real estate in 2005, after a stint in a finance company. His property brokerage, Silver Heights (established 2007), ground to a complete halt two years later. But Munshi was undeterred.
While others licked their wounds, he burnt the midnight oil checking out viable projects.
“I’ve been tracking the market since the crunch. We continuously ran feasibility studies on stalled projects. Positive feasibilities started to show in early 2011.”
After a brief hiatus, he steered Orion Holdings with an initial $10 million (Dh36.7 million) capital from Asian investors, quietly buying up completed units. At one point, he snapped up 400-plus commercial units at the International City (IC), Dubai’s middle-class township.
“Occupancy in other areas fell, but not at IC, where demand actually went up,” he said.
Around the same time, he also brought plots at Jumeirah Village Circle at Dh65 to Dh70 per square foot (sqft), before unloading them at Dh270 per sqft –- a whopping 300 per cent jump over two years (IC units rose by 50 per cent in 2012).
Armed with a strong finance background, Munshi took a plunge into Dubai’s stalled projects with razor-sharp focus on numbers. “We check what stock is left [unsold] from a developer who got stuck. Then we ask: ‘If we buy these remaining stocks, is it enough to complete the project?’ If the answer is ‘yes’, we go ahead,” he said.
In-house lawyers take months to iron out legal kinks and Munshi leaves the day-to-day construction to the original developer. Using his financial muscle, Munshi is able to insist on a high-quality finishing as he opens the money tap to restart construction. “Quality never runs out of style,” he said.
So far, Orion has been involved in reviving up to 20 stalled projects (Munshi expects to ink four projects in August alone), or about 10 per cent of 200 or so Dubai buildings stalled by the 2008 crisis.
That’s a drop in the bucket against more than 1,300 construction projects currently underway in the UAE, valued approximately $418 billion, based on Glass & Glazing Federation MENA data.
His self-effacing gait defies his stance as a self-styled “prince” of junk property. “Eventually this [reviving stalled projects] had to happen. They were stalled in 2008 as there was no value — or profit — in putting in more money. But now things have changed.”
But who will stay in all these units, once completed?
“When you see the massive daily rush-hour traffic on Shaikh Zayed Road, it tells you a story. Dubai has solid infrastructure, tourism, manufacturing and services industries. People who run all that need homes, too.”