Catching Dubai's coattails

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Saeed Currimjee, managing partner of Al Jabal Real Estate, says he is banking on the rising room rates in Dubai to draw business into his apartment hotel project in Ajman.

Can you tell us about the Crescent Star project?

The Crescent Star is a 33-storey, four-star apartment hotel located in the 705,525m² Marmooka City in Ajman. This is the first development of its kind in Ajman where investors can earn returns through investing in the hotel sector and not be bothered about the fluctuations in the real estate market.

With the shortage of hotel rooms in the UAE, we are expecting a rate of interest of 20% a year. And that is the USP of our project.

But will tourists come to Ajman?

Forecasts for tourism in the region are very good. We are targeting the tourists who come to Dubai and who might like to live in Ajman. As land is more expensive in Dubai, so are the room rates. We are offering an option for tourists to live 25 minutes away from Dubai airport for less than half the price they would pay in Dubai.

We are not targeting the crème-de-la-crème, we are looking at the mass market. We forecast that we will be able to sell an average room at Crescent Star for US $122 (AED450), and it is impossible to find a room at that price range in Dubai for a four-star hotel.

But what about the traffic? Will a tourist want to commute between Ajman and Sharjah?

A lot of people commute between Ajman, Sharjah and Dubai. I feel a lot is made of the commuting between the emirates. People all over the world commute, whether it is in London or New York. For example, not everyone works in New York lives on Park Avenue. The drive between Ajman and Dubai is about 25 minutes when there is no traffic and 45 minutes when there is traffic.

Bollywood star Fardeen Khan was present at the launch party of your project. Do you feel celebrity endorsements help in the selling a  project?

It does add value to have a celebrity at an event. But from a pure business perspective we have done our research on the project and are not relying only on the glam factor.

What is your take on the current financial crisis? Will it have an effect on the financial viability of your project?

The hotels rates in Dubai have not fallen. I agree that property prices have fallen and premiums and profit margins have come down. What was bought six months ago is valued at a lesser rate now. But, none of the hotels have dropped prices, they are still going at full capacity. Has Dubai stopped building theme parks or opening malls?

Dubai is still going to keep attracting tourists, which will mean the requirement for more room nights. We are giving people a chance to share in the tourism boom for life, a yield for the investors daily, which is managed by professional as opssosed to just buying an apartment and renting it out.

When will construction start? Have you awarded any tenders yet?

We are currently evaluating business partners who we feel will be able to give our investors the best returns, then we will plan to proceed with construction. In terms of security for the investor, all the escrow accounts are in place. But in regards to starting construction, we have not finalised a date.

But the good news is that construction costs have gone down, so it will be easier for us to build. We are still finalising the design in certain main areas. Adnan Safarini Engineering Consultants are the architects for the project.

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