Schon Properties announces the development of iSuites
1. The development of 2,700 hotel apartments at a single-site development near Dubai South – home to the 140-square kilometre future city that hosts Al Maktoum International Airport and Expo 2020 site
2. With a development value exceeding Dh3.2 billion, this is the largest single-site hotel apartment project in the Middle East and North Africa region
3. Investors are guaranteed a 12 per cent average annual return – the highest for property investors
Schon Properties, recipient of the Top Private Developer award for 2016 by Forbes Middle East, announces the development of iSuites – a massive Dh3.2 billion (US$870 million) home-grown hospitality portfolio that will see the development of 2,700 hotel apartments at a single site within Dubai Investment Park – close to the World Expo 2020 site.
The entire complex includes 21 mid-rise buildings – each having 9 floors including two basement floors – will be delivered by 2020, just before the historic Expo 2020 begins in the fourth quarter of 2020.
The branded hotel apartments will be managed by international hotel operators to offer greater comfort to visitors. Part of the iSuites inventories will be offered to investors that guarantees a high return on investment.
Sales of the iSuites are currently on as investors and buyers could now purchase a hotel suite or a service apartment that will be managed by international branded chain hotel operators and offers buyers a higher income of 12-15 per cent per cent.
“We are launching iSuites – a home-grown urban hospitality concept from the UAE targeting millennials – on the eve of the UAE national day, as the country moves forward to realise the government’s Vision 2020,” Noorul Asif, Chief Operating Officer of Schon Properties, says.
“Dubai, which has 100,000 hotel rooms and hotel apartments, will need 40,000 new hotel rooms and hotel apartments within less than 46 months, as the clock is ticking for Expo 2020 – the largest exposition to take place in the history of the Middle East – that the city of Dubai will proudly host.
“In order to help align with the Dubai Government’s Vision 2020, Schon Properties has stepped up its efforts to support the government’s tourism vision that will prepare the city to host 20 million hotel guests per year by 2020 and support the 25 million visitor traffic to the Expo 2020 site.
“iSuites is our own development plan that further strengthens the Government of Dubai’s vision. We have gathered all our resources to realign our development game plan to ensure the timely delivery of the project that will be connected to the Expo 2020 site with the new metro line.
“So, visitors to Dubai could check into iSuites within ten minutes of arriving at the Al Maktoum International Airport, as the project is located just two stations from the world’s largest greenfield airport development project within Dubai South.”
iSuites – a lucrative investment product – will help contribute to the economic growth of the UAE and help realise the country’s vision 2020 and 2030. Schon Properties, which will retain a third of the 2,700 units in iSuites, will offer a limited number of units to the public to purchase and benefit from a higher return on investment.
iSuites envisages smart modern living of functional and futuristic facilities. The full-serviced hotel apartments are targeting millennials interested in urban lifestyle hotel stays, small families coming to Dubai on a short- term corporate assignment or a pure family vacation.
“Our study shows that an investor could get an average net income yield of 12 per cent return on investment from our latest offering – iSuites – that will help investors make more money with less pain,” Noorul Asif says.
“The yield is backed by strong numbers of tourists coming in the proximity of the iSuites site which will lead to strong occupancy levels and high average daily rates (ADR’s). The movement of 160 million passengers through Al Maktoum International Airport, 25 million tourists to the EXPO 2020 site and 5 million annual tourists at Dubai Parks and Resorts – are the three mega demand drivers for iSuites. All these projects are what most of us in Dubai are banking on, and with our location next to them, we are very confident in the long-term prospect of the venture.
“Dubai’s hospitality market is segregated and spread throughout the city, but there are niche tourism hot spots which are expecting massive gains in the next 3 years. Jumeirah Village, Business Bay, and Dubai Marina and other master communities are not niche hot spots as they are far from the main attractions. Dubai Investment Park, being located directly next to EXPO 2020 is a major niche tourism hot spot and will give high returns to investors.
“In all probability, the annual income yield could exceed 15 per cent, in which case, the investor could get back the entire value of the investment in less than seven years. Our views on this are clear by retaining over one-third of the development going forward. On top of this, I expect 50 per cent capital appreciation on the asset over the next three years, due to the site’s prospects.”
iSuites strategic location being next to the world’s largest airport – Al Maktoum International Airport – assures high occupancy rates and secure income for investors. The iSuites features over 52 restaurants and cafes boasting outdoor areas overlooking the Crystal Lagoon as part of a master-planned development. iSuites includes a 125,000 square feet retail promenade called the Laguna Centrale Mall. These include urban themed cafes dedicated for entrepreneurs, kids play area’s and nanny services available for all guests. Bank, retail, spa’s, supermarkets, pharmacies, healthcare facilities, and shopping are available at the Laguna Centrale Mall to give full service to all guests for the hotel development.
“iSuites is the commencement of Schon’s restructuring plan and change of development direction, fully focusing on hospitality ventures going forward. The future of Dubai is hospitality, and with HH Sheikh Mohamed Bin Rashid’s vision for 20 million tourists, the city has a bright future with unparalleled infrastructure and the best tourist attractions in the world. We offer everything form ski slopes, to the dessert, to culture, to arts, to beaches, to year round sunshine, all with 100 per cent security, hence, we believe tourism is the best investment in Dubai.”
The Expo 2020 site will be used as the Dubai World Trade Centre (DWTC), hosting all major meetings, conferences, exhibitions, and events. Dubai added 4,337 hotel rooms in ten months of the year to reach 100,012 in October 2016, up from 95,675 hotel rooms in 2015.
The Department of Tourism and Commerce Marketing (DTCM), the emirate’s tourism industry regulator, said, Investment in Dubai’s hotel industry is expected to pick up in the next four years with additional 40,000 serviced hotel rooms and hotel apartments to be added to the existing inventory of 100,000 – to serve the anticipated 20 million hotel annual guests by 2020, in addition to the 25 million visiting the World Expo 2020.
This means, investors and developers will have to build 10,000 hotel rooms per year to reach the target of 140,000 hotel rooms and serviced apartments to accommodate the visitor traffic. Of the 100,012 hotel rooms and service apartments available in Dubai, 31,953 or nearly 32 per cent belong to the five-star category while 22,108 rooms fall under business hotels or four-star category and 21,104 rooms fall under 1-3 star rating.
Among the rest, 9,417 are deluxe hotel apartments while 15,430 hotel apartments fall under standard hotel apartment category, DTCM statistics show. In terms of the number of hotel and serviced apartments, Dubai is host to 672 hotel and hotel apartment complexes till date. The industry added just 12 in the last 11 months from 670 last year.
Of the 672 hotels and hotel apartment complexes, 205 are service apartment complexes with the number of deluxe and superior hotel apartments reached 64 and the standard hotel apartments reaching 141. Dubai currently has 93 five-star hotels, 108 four-star business hotels and 266 budget hotels with standards ranging from one-star to three-star ratings.
The DTCM expects occupied room nights in hotels and hotel apartments to reach 35.9 million, representing a 10.8 per cent compound annual growth rate (CAGR) from the end of 2015 to the end of 2018. As such, the overall room supply is expected to reflect similar growth, reaching 134,000 rooms by the end of 2018, the DTCM projects.
About Schon Properties
Schon Properties, one of the top private real estate developers in the UAE, has an 8 million square feet development portfolio valued at Dh7 billion. The company has over 3,000 customers and as of October 2016 has successfully delivered over 1.6 million square feet of developments till date. Schon was the first company in Dubai to launch affordable housing targeting midmarket buyers, and the first company to introduce a post-handover payment plan.
Schon Vision 2020 entails focusing on sustainable income models via hospitality investments next to EXPO 2020. As a corporate policy, the company intends to retain its assets for sustainable income, as opposed to conventional methods of sales used by other developers. With a staff of over 400 and being vertically integrated, the company strives itself on corporate governance and best practices worldwide.
iSuites is a 21 building project (2B+G+8), comprising 2,700 luxurious hotel apartments, 52 restaurants & cafes, and 125,000 square feet shopping mall called the Laguna Centrale Mall. The project aims to serve the shortage of 4-star hotel rooms close to the EXPO 2020, Al Maktoum Airport, and Dubai Parks & Resorts. iSuites’ total constructible area is upwards of 2.6 million square feet.
The turnkey construction contract has been awarded to Dubai Civil Engineering. Dubai Civil Engineering was established in 1976 and has a 40-year solid track record of building trophy projects across the Middle East. iSuites targets trendy millennials looking for an urban lifestyle hotel stay. Designed with elegance, the interiors of the hotel are chic, minimalistic, and contemporary.
Interior designed by one of the top architects Swiss Design Bureau, based in Geneva. The FF&E includes all smart technology aimed for millennials and the building entails a green environmentally design, saving on utility consumption charges. Construction works commenced on October 2016 and first deliveries are expected by Q2 2019. The full project completion date is set for Q2 2020.