Turning the tide

Turning the tide
Published: 12 October 2017 - 6 a.m.
By: Neha Bhatia

This July, Luxhabitat, a high-end real estate company, revealed that second-quarter sales volumes in Dubai’s secondary prime residential market this year were 4% higher than corresponding figures for Q1 2017. Based on data analysed by Reidin, Luxhabitat stated that a price uptick was noted in the prime residential segment during Q3 2016, with values “steadily rising” since the period.

Meanwhile, property portal Bayut.com stated that the UAE’s real estate sector performed a “balancing act” in the first half of 2017. In a report published this July, Bayut added: “Despite both sale and rental prices in Dubai and Abu Dhabi having experienced a small dip, the market still represents a rich ground for investors looking for strong returns.”

And investor activity in Dubai is, indeed, on the up. Dubai Land Department’s (DLD’s) H1 2017 Transactions Report, released this July, revealed that the value of real estate transactions in the emirate during the first half of this year amounted to $36bn (AED132bn), which was achieved through 35,571 transactions. The H1 2017 results reportedly show a 16.8% growth in total value, and a 26% increase in the total number of transactions, compared to figures from the same period in 2016.

Counting on this market sentiment is Lootah Real Estate Development (LRED), which is currently building The Waves, a two-tower residential project, in Dubai’s Al Barsha locality.

The 1.6ha (175,905 sqft) development is being built in Al Barsha South's Jumeirah Village Circle (JVC) neighbourhood, and features two four-story apartment buildings. Ground was broken on the project in September 2016, and a year later, works on the project are close to halfway completion. Overall completion is due in Q3 2018.

OST Constructional Projects is The Waves main contractor, while Arif & Bintoak is providing architectural and electro-mechanical consulting services for the development. Global Tech is the project’s green building consultant, with mechanical, electrical, and plumbing (MEP) specialist, Pepco Engineering, also part of the project team.

The Waves’ buildings each feature two basements, one ground and three typical floors, one floor dedicated to a duplex apartment, and a roof. In total, 135 units, featuring studio, one-bedroom apartments, and one-bedroom lofts spanning between 45sqm and 186sqm, will be developed as part of The Waves.

In a market where high-end real estate has mostly comprised towers over the last decade, The Waves turns the tide with its concept design and stylistic elements. Mustafa Jassem, group business development manager at LRED, points out that The Waves’ units are significantly more spacious than contemporary, and have been designed predominantly based on end-user choices and preferences.

LRED's most recent project completion is Shamal Residences in JVC, which features 259 studio and one-bedroom loft apartments. Jassem says the development of Shamal Residences was a learning curve for LRED, "in terms of the community, buyers' preferences, and the type of buyers we receive".

He continues: "We received a lot of interest from international investors, local investors, and even end-users, who want to own an apartment and consider their annual rents as part of their future investments. This gave us a clear indication about how much the market is changing from an investment-driven real estate sector into one driven by end-users."

This factor was also a key consideration that contributed to The Waves’ design, he adds.

"End-users became our focus, so we [incorporated] these factors into our designing process and start building around it. We’re not just building properties – we’re building homes. Nobody would like to live in a small apartment.”

Jassem says that while smaller units “make it convenient when it comes to the price”, LRED concurred that monetary considerations are “not the main determinant” for all properties.

He explains: “Everybody would like to have their own home, and when we illustrated this idea, we thought about spaciousness, gardens, play yards, and the needs of families with children. This was our main driver behind The Waves.”

Shamal Terraces, another LRED development in JVC, is a fair sample of the company’s concept ideas and philosophies. Each G+2 townhouse within the development spans a total built up area of 416sqm to 591sqm, and features high ceilings, large glass sliding doors to allow natural lighting, expansive terraces, and landscaped garden spaces. The company’s Ewan Residences development in Dubai Investment Park (DIP), which features 83 buildings with up to 12 apartments in each block, is also a prime example of the sociological influences that drive LRED’s developments. Homes at Ewan feature vast roofs, swimming pools, and terraces which, Jassem points out, are regularly used for community social activities. In fact, he adds, terraces form a crucial part of LRED’s plans to offer holistic and family-oriented spaces.

“We think terraces are a way for people to indulge in social activities, and offer them more entertainment and outdoor options,” Jassem continues.

“Even if the residence is a building instead of a townhouse, that doesn’t mean I should be behind my doors or in the balcony all day. With our terraces, we’re offering a spot in the building where residents can engage in more activities.

“This is what we sensed from end-users through some dipstick research studies, which were carried out to understand their feelings and expectations.”  

It is these design principles that have guided the development of loft units in LRED’s projects as well. The Waves will feature two one-bedroom loft apartments, and Jassem says the units will further LRED’s drive to promote a social lifestyle.

“The lofts are something unique to this market,” he continues.

“We had a success story with our lofts at Shamal Residences. These units feature a living room on the lower level and bedroom on the upper, thus allowing end-users to separate their day and night activities across both spaces.

“The lofts also feature big terraces, and the living rooms feature floor-to-ceiling glass, which offers beautiful views of the Dubai skyline.” 

While Jassem is unwilling to comment on project costs, he says that the amount would be considered “above average” in the contemporary market. Material pricing is a significant contributor to this trend.

“For instance, we’re introducing new types of kitchens that add value to the look of the property,” he explains.

“This costs slightly more than the market average, and it puts up our construction costs by 20% to 25%.”

The focus on materials supports the changing buyer market, which Jassem says is “very smart these days”, in addition to being a more property-aware audience as well: “They sometimes get references from peers and families, and are more educated about market dynamics today. Even end-users that are first-time buyers now employ more diligence and visit multiple units.”

Besides timely delivery and quality, post-handover services are also becoming an element that buyers are now demanding from developers.

“As a developer, we must choose the right owners’ association (OA) and participate in selecting the best facilities management (FM) contractors to deliver the quality we’ve promised,” Jassem explains.

“We’re not just selling property – we’re delivering a package of services, which is a part of the experience we offer.”

At least 25% of The Waves’ units have been sold, and Jassem says this is a healthy performance according to LRED’s metrics: “Sales were launched around six months ago, and since then, we’ve gone through the Holy Month of Ramadan and summer, which is usually an off-season period. So, 25% sales in six months – for large units that come at a higher price than the market average – is a good indicator that what we’re doing is correct and right.”

Commenting on project funding, Jassem says that works were kicked off through an escrow account. In addition, the company also offers financing schemes to “make it easy” for its buyers to make payments.

He explains: “We are very flexible with our clients. The project’s payment scheme involves 50% payment during construction, and 50% upon handover. However, we understand that the market is a bit flat at the moment, and our special product requires different planned.

“So, we offer flexibility in terms of buyer requirements, and also try to help them raise funds such as mortgages or personal loans through our strong relationships with banks and financial institutes.”

This approach is also guiding LRED’s ambitions to deliver The Waves ahead of next year’s scheduled third-quarter completion. Fourth-floor works have been completed, and roof slab activities are underway at the project site. Jassem is optimistic that the project, upon delivery, will fulfil the expectations of the buyers that LRED is targeting.

“This is a promising project for LRED, and the project features all the heritage we’ve accumulated as a company,” he concludes.

“We’re building a brand, not just a property.”

Click here to add your comment

Please add your comment below
Name
Country
Email
Your email address will not be published
Captcha