So much has already been written and said that the next two years will be a turning point for the Dubai freehold market, as tens of thousands of new apartments will be commissioned. These figures are echoed by those who are confident in the occurrence of an excess of living space. We are talking with Dr. Mahdi Al Aswid, Managing Director of the real estate company Halsson Real Estate. Dr. Al Aswid, an engineer by training, believes that there is still much that can be done in the market, and in particular in the field of housing.
Dr. Al Aswed rejects speculations about a massive revision of housing prices in the near future, insisting that most of the development of the market is on the right track. And he proves this by launching the first project of his company - a residential tower in the Dubai Marina area.
Many would say that you were late with entering the market, at least with those projects that you have in your portfolio.
The Dubai real estate market has a number of advantages, and foreign investors continue to pay attention to them. The three main factors that support real estate prices are: the cost of building materials, the technology used, and labor. For all three elements, prices have risen markedly in the recent past.
Last year alone, the price of steel increased by 30%. The same situation is in the labor market. Well, and in this situation, real estate prices may decline? The developer cannot sell his project at cost or at the price that was on the market a couple of years ago. There are simply no such prices. Looking ahead, I will say that market prices will undergo changes, but certainly not downward.
You are talking about the basics, whose positions are quite strong. But who buys property in new buildings?
Geography plays an important role in the ever-improving image of Dubai. A warm sunny climate and safety are two more factors for investors looking for a suitable place to buy a second home.
The real estate market here does not depend only on investors from one country. I note the great activity of buyers from South Africa who would like to move to Dubai from the overpopulated cities of their country.
Can a new company such as yours come so easily into a fairly saturated market?
I was involved in the most dynamic real estate markets - London and the Spanish Costa Del Sol. The projects in which I participated concerned the acquisition and development of land. And in places like London, Westend, Hampstead, and St. Johns Wood, that meant acquiring existing buildings, remodeling them, and reselling them to investors.
In the past three decades, the global real estate market has experienced three booms. In the 70s and 80s, places such as Boca Ratun and Fort Lauderdale were ahead, then there was a peak in sales in popular places in Spain, and in the second half of the 90s London experienced a tremendous rise in the market.
Now, it seems, the time has come for the Middle East and, in particular, Dubai to declare its share in such a fast-growing market as construction and real estate. Halcon Real Estate wants to be part of this.
In addition to me, Halcon includes a group of investors from different countries of the region. We have funds and projects that will occupy their market segment and find a response from customers.
What is the schedule for the Skyview Tower project?
We decided not to announce the start of sales until the soil testing and signing of the zero-cycle contract. According to our policy, we are going to invite only five of the best contractors.
They will be provided with a detailed specification of the project, which they will have to strictly observe. A work plan will also be issued and any delay will result in serious fines. We believe that this will be a good “incentive” to complete the facility on time. Our goal is to put the facility into operation in the fall of 2008. The project cost is approximately 180 million dirhams, and the estimated sales price is 1000 dirhams per square foot.
The building will have only 210 apartments, we also want to leave a number of small apartments in order to satisfy buyers with average incomes. The location of our tower opposite the Grosvenor house is also a plus.
Are you planning any new projects?
We are currently negotiating another project in the same area, and possibly in the Business Bay area. This is likely to be a multifunctional project.
