By James Bennett
ETA Star’s executive director Abid Junaid has brought a wealth of experience to the fast-rising property conglomerate.
The UAE property market is moving into a new phase, according to Abid Junaid, and he would know. As executive director of ETA Star, one of the most profitable and successful property developers in the Emirates, and increasingly India and Sri Lanka, he has seen the market make massive strides since it was liberalised four years ago.
The speculative run, however, is over he says, as are the days of speculative sells and offers by real estate agents and investors alike. This may not sound like good news. On the contrary, Junaid explains: “Speculation has been good for the industry, as has off-plan selling. It has also been good for the speculators themselves as they’ve been able to buy low and then sell properties at the highest profits possible.
“But now with so many projects on offer, you aren’t able to replicate that and that trend is over now.
The overall market is still very positive and upbeat and as long as this gap between demand and supply exists it will be fruitful.”
The market is maturing and that is a “great sign for the future of the country”, Junaid admits, but he avoids talking of a crash, with the large majority of property companies tired of hearing the ‘c’ word. You can’t blame them — 2006 was full of it — but at the same the whole industry is acutely aware that an overall correction is long overdue.
ETA Star has some of the most up-and-coming and potentially iconic properties in the three markets it operates in, including the Grandeur Residences on the Palm Crescent Jumeirah, Marina 23 in the Dubai Marina and Al Manara in the rising Business Bay. Junaid, however, admits that in five to ten years Dubai and the UAE will reach “saturation point”, and that ETA is currently examining other overseas development markets in order to spread its portfolio.
“We started in the UAE in 2003 as soon as the market was opened up but we realised that the UAE market, which has grown and continues to grow, and has good growth potential over the next five to ten years, is going to reach saturation point at some time. Not soon, but in five to ten years. We have to plan for the future now, so we have also looked at overseas markets.
“We are going to use the expertise we have gained developing properties over the last four years and move to other countries including Turkey, North Africa, the CIS countries and the Far East. We have entered into Memorandums of Understanding in Qatar and Turkey, and both are on the immediate horizon.”
The business has ambitious plans and Junaid says that it hopes to have close to 40% of its portfolio attached to overseas markets by 2010. However, with ambition must come investment. Fortunately, as the executive director explains, the company, part of the larger US$4bn ETA Ascon conglomerate and owned by the well-known Al Ghurair Group, is currently able to call on huge internal capital resources in order to fund further growth.
“Firstly we are very entrepreneurial and enterprising, and secondly we are a very big group and have the resources in terms of human and capital resources. What are needed are the ideas and the vision, and with the resources we have we are able to translate that vision into reality,” says Junaid, in charge of billions of dirhams himself. Started in 1973, ETA Ascon launched its Star offshoot in 2003 and has since gone from strength to strength, launching over 4.5 million sq ft of premium properties located at prestigious freehold areas in Dubai and the Northern Emirates. The firm has plans to develop another four million sq ft of commercial, residential and hospitality projects located in Business Bay, Arabian Bay, International Media Production Zone (IMPZ), Dubai Internet & Media City, and a luxury resort & spa in the Jumeirah Palm Crescent besides two hotels, apartments, and residential and commercial towers located in major districts of the Emirates. Besides the UAE, the company has also developed high value properties in India and Sri Lanka, delivering more than 2500 units and five million sq ft in property.
Post-MBA, Junaid began his professional career with the group in 1987. Having just graduated from college, his first job was to look after the facilities management of another offshoot company group called Emco in Abu Dhabi, becoming its CEO two years later aged only 25. The US$5.4m turnover company gave him a good platform to run a company, he explains, “and since I’d just come back from management school it gave me a lot of freedom and exposure to manage a company.”
He then began doing what he does best: implementing the idea that meticulous planning as well as attention to every detail of the company’s operations are the building blocks to a company’s success. With that in mind, the business soon became the first of its kind in the UAE to gain an ISO-9000 best practice certificate in 1995, and the only company in the Emirates to receive the Abu Dhabi quality appreciation certificate two years in a row. “My own professional management and pushing everyone for continuous improvement in this pursuit of excellence was the key,” he says.
Junaid then joined Ascon in 1999, but it was only when the property market was liberalised in Dubai in 2003 that ETA Ascon decided to create an independent company. ETA Star would take advantage of the opportunities that the newly opened real estate market was offering. “Today we have more than 100 professionals working for us, we do end-to-end, from the design aspects of property to project management, and the entire marketing process. We do the whole spectrum of development and have launched more than 20 projects in lease and freehold in less than four years.”
Yet Junaid and ETA don’t rest easily and are instead aggressively pursuing every avenue possible in search of further market domination. Its next venture has been made possible by the creation of another division entitled ETA Hospitality, with this February seeing the unveiling of the first in a series of ETA Star branded serviced apartments in Dubai.
“There are two things driving the UAE economy: one is property development, and the other is hospitality, so we also got into that. We are starting up branded serviced apartments and will have our first flagship property in the portside area of Dubai near the Maktoum Bridge.
“The first property will open in a month’s time in Port Said and will be called the Star Boutique, and then we will be rolling out a new property every three to six months. There are four more under construction. And we will have 1000 units by the end of 2008, beginning of 2009.”
However that’s not the biggest news, says Junaid, hinting at what the future holds for him and his predominantly Indian colleagues. A flotation in three years’ time could well be on the cards if the business is serious about its huge expansion plans and overseas aspirations before 2010.
“ETA is a privately held company but would certainly consider listing when the time is right. When there is a need for us to fund our expansion by going to the stock market, we would do it.
“Currently we are funding our expansion through internal resources generated through liquidity as well as through debt. Certainly we have ambitious plans to go into overseas markets and when the time is right we will do that and we are certainly looking at this as an option. There are various ways we could list in Dubai or on AIM in London, and we are considering all of those.”