Still booming

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Tim Boswell.

The region's Property and Real Estate CEOs give an insight into why the current boom has become self-sustaining and how governments are working to put in place the appropriate infrastructure that the sector craves.

Tim Boswell
Ocean View

Dubai is a growing city rather than a second home: Much more business is coming from within the UAE: The bubble won't burst as the end users are already here.

How does the region compare to the rest of the global market?

The UAE is on its own because of all the different nationalities buying here. Where Dubai's concerned it's a market where people are coming to relocate and build a life for themselves here. It is more of a growing city rather than a second home for people. You have so many different nationalities coming to Dubai because they've heard about it from word of mouth, I can't really relate it to anywhere else in the world apart from China and the Chinese market is driven mostly by the Chinese. What we're finding now is that we have no single nationality which we can say that we deal with the most. Every deal is with people from different nationalities and different countries. The biggest advertising for Dubai is word of mouth. What's happening at the moment is that there aren't a lot of places left in the world where people feel that they can work hard and advance themselves, but this is one of them.

When will the current growth peak?

I think it's got another 20 years left in it. I'm not saying that just as a real estate broker so people keep buying houses from us either! The more impressive Dubai becomes the more people will want to come here and relocate. So the more impressive it looks, the more investment will come into the country. You imagine what it will look like in ten years time, how can it slow down really? I'm sure that people were asking the same questions in London, New York and Toronto in the 1950s. If it keeps growing, how can it peak? And it will definitely keep growing at the same rate. When we first started most of the people buying here were speculators who had no intention of ever relocating. Now I would say that 20% to 30% of those people are. The word on Dubai is so positive around the globe that I honestly think that people will continue to come here and I don't think that the supply will be enough. I read an article the other day which said that supply would outstrip demand by 2009 but I don't think that it will. And we have more demand for the products that we sell than we ever did at the beginning.

Are you confident that demand will match supply?

It's not so much speculators now, people coming in and putting down 10% deposit and coming back 3 months later and asking for 30% premiums. It's more a real investor now, and it's also more big funds. There are a lot more big financial institutions that are involved in the market. It's more of a real substantial equity now in the property. Whereas before people would only have taken 10% on the building but they would announce that it was sold out, now if you sell property, say on the Palm, people are paying 100%. Obviously there's a bit more lending now. A lot of business is now coming from within Dubai. At the beginning 90% was coming from outside of the UAE. Now 60% is from people within the UAE. Anybody who missed it or was sceptical (there was a lot of negativity at the beginning within Dubai, and it cost a lot of people a lot of money) is now buying.But international speculators got the ball rolling. A lot of the interest came from the tourism industry, because the hotels were so impressive that it drew people to Dubai.

Is it affordable?

The other day the Sunday Times called me and they were talking about how the houses on the Palm were really close together, but you imagine all the facilities that are around there. Also, if you look at the houses that are in London like Kensington for example, they are like Mews houses. And they're millions of pounds, even for one bedrooms. If you look at the quality of all the hotels and resorts around the Palm how can it be expensive for what you get, no matter how close together they are.

Is the current regional infrastructure adequate for all these large-scale projects?

Within Dubai they're playing catch up. They're victims of their own success. Any successful city in the world is going to have congestion. If you went to invest somewhere and there was no congestion you'd have to wonder if it was worth investing. I look at all the new roads around the marina, and the new bridges, I honestly don't think that they could be doing a better job. Within the next 12 months it's going to be pretty clear, for a growing city. It is one of the fastest growing cities in the world. What other country could you be working in where you have the back-up of the government like this? They'll sell you properties in Spain and you won't even have a road going to it. They are allowing people to make money and become successful, they are marketing massively around the world, and they are spending as much money as they possibly can to get the infrastructure in place. You're always going to have people who complain, but whatever industry they're in if there was no traffic there'd be no business.

How long have you been in the region? Where are you planning to expand?

The company has been going for about six and a half years. We were in the very first launches and we were the very first company to resell the Palm, so we actually started all the resales of the Palm.

We are looking at RAK and Umm Al Quwainn, but the main focus is on Dubai. You have to have end users and at the moment that's in Dubai. Everybody was talking about the bubble but the only way the bubble was going to burst was without the end users, and they are here now.

How have strategies changed in the last five years?

We don't get involved in selling anything we don't like, we only sell products that we would buy if we could afford them. We have no unhappy customers, there's been a few delays but everybody expected that on these projects. At the end of the day people made money, so that always softens the blow doesn't it.

We sell a lot more units than the competition would probably give us credit for. I've taken a few showrooms in the Dubai Marina, I've also taken another office next door and opened a rental section for investors who buy and want to re-rent their properties. I think we've become more professional. Also whereas a lot of firms sell to people abroad our strategy is to sell to people within Dubai and to grab the people when they come here to visit. When you look at the amount of wealth in such a small area I don't know why we'd want to fly around the world trying to reinvent the wheel.

Do you have any upcoming launches/projects?

None that are finalised yet but we are looking at something off the Palm Jumeirah.

What are the main differences when doing business here compared to other markets? Is there more leeway (financial and legislative) in terms of what projects you can roll out?

Financing was a lot easier in the UK market but it's getting better here. There's more competition now and it's easier to get access to the funding.

What is the most challenging part of the job?

The thing that I find the hardest is when it comes to picking a new team member. I don't like to say that people work for me, I think we all work together. We have people from all different backgrounds and industries working here, it depends on their personalities and their honesty.

How hands on can you be with each new and planned development?

I like to keep an eye on every deal that goes through, so yes, I like to be very involved with all aspects.

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