By Neil Halligan
George Azar might have had one of the world’s most celebrated brands behind him when he launched a new property agency last year, but the former banker still had plenty to do to get Sotheby’s International Realty up and running.
In the years before the property crash in 2008-09, friends and work colleagues urged George Azar to dip his toe into Dubai’s booming property market, and take advantage of the impressive returns on investment.
As a banker in the city, Azar resisted the temptation, sensing it wasn’t the right time. Fast forward a few years to when the franchise for one of the world’s most luxurious property brands Sotheby’s International Realty (SIR) came up for tender, and Azar found himself among five in the bidding process for the UAE-based property franchise.
As the only one without real estate market experience — a banker up against four real estate companies — Azar says he won the lengthy bidding process through his pitch and approach.
“[I told them] ‘my interests are more aligned with you in terms of my downside risks than any other candidates that you have’,” he says, of the four-hour meeting with the company’s chairmen.
Azar was eventually successful, and won approval from Sotheby’s Auction House, which had the power to veto the deal.
SIR, as a franchise that is independently owned and operated, was effectively a start-up when the first office opened in Dubai in late 2013, with no systems in place for lead generation and no marketing capability.
“It wasn’t like I went out and bought a real estate company and I integrated Sotheby’s International Realty under it. We had to build everything from zero. We spent six months putting in rules, regulations, systems, creating a real estate company from scratch,” Azar says.
He says the assistance of Billy Rautenbach (who ran Better Homes for eight years) on a three-month consultancy basis was a major help in getting the operation off the ground.
“She was instrumental in bringing the right agents, in terms of the quality that would fit the brand. Sotheby’s International Realty is like the Goldman Sachs of real estate, so everybody wants to work there,” he says.
Using his own background, Azar says he operates SIR more like a bank, based on relationships and specific plans and targets. “Many people will tell you you have to use the portals, and do this and that which is the normal game, but we are actually putting 80 percent of our effort on the total opposite of what the market does, because I don’t want to be on the same trade like everybody else,” he says.
“Sotheby’s International Realty is a company of course that has leads, but it’s a company that brings people who want to be aligned with the brand and have the relationship. It’s like Merrill Lynch; it provides you with the product line and it’s up to you to go and find the clients.
“I’m not creating a company where I am going to start feeding agents to sit on the desk and wait for the lead that I’m going to generate. They should be self-dependent.”
The agents in Dubai have access to 50,000 listings on SIR.com worldwide, so any client can buy or sell out of the company’s 800 offices in 62 countries.
“We have real estate everywhere,” Azar says. “Every client of ours who has an investment in the UAE has probably two-folds of that money invested outside. We try to educate our agents that you need to speak to them [clients] as a global consultant and go out and talk about the intangible portfolios.”
The company has been subdivided into a number of different businesses: local sales, international sales, a local leasing team, a project sales division, an investment division and a client rep business, which will work across all divisions, looking after individual clients in the same way a private banker might.
“One of my key targets eventually is to find the right bankers — earning between $200,000 and $300,000 a year — who have relations, and can integrate under the brand. But you need to be able to prove to them why it works and how the money could be much bigger,” Azar says.
The business plan thus far has proven successful. This year, the company is expected to do an estimated $500m in local sales, and there are plans to grow that by at least 60 percent in 2016 when the international sales start to kick-in over the coming months, when a number of areas Azar and his team have been working on will begin to materialise.
This year’s Cityscape (8-10 September), for starters, is set to firmly establish SIR on the Dubai property market.
The company will be centre stage, having recently signed a deal to have exclusive listings on “two very large big government projects that we have secured” — both of which will be announced at the region’s biggest real estate event.
Having secured the UAE franchise just over a year ago, Azar says the firm has recently signed franchise agreements for SIR across the whole GCC region — to be known as Gulf Sotheby’s International Realty.
Over the next six to 12 months, he says the company will open seven offices across the region — in addition to the recently opened site in Abu Dhabi — with a different plan for each.
“Abu Dhabi is very important because GCC buyers look at Abu Dhabi from a yield perspective. It has a good yield component and if you look at Abu Dhabi in the last three or four years, the biggest buyers were GCC buyers,” he says.
“Dammam has a different business plan to Riyadh and Jeddah. Each has a different client base and appetite for products. Some of the offices will be self-dependent. The Saudi offices will have a manager that will run the three different cities. Riyadh and Jeddah will each have their own plan, but what is in common in all of these cities is that our plan is to start offering our UAE properties and off-plan projects as well as international,” he adds.
The first stage for the GCC countries is purely UAE sales, he says, promoting the big developers' off-plan sales.
“We will focus on the big brands, so we will never associate ourselves with a private developer and taking a risk on that, unless it’s a developer we know, and we’ve seen the funding and the structure. We have very strict guidelines of what we will take in the GCC. We will be talking to established developers and probably do some business with them, and possibly represent them in these GCC countries with our local operations on the ground,” Azar says.
“For example, if I am talking to a developer today in Dubai, what I can offer him is to tap into a GCC market that no-one else has. I will have seven offices up and running, and I will have a marketing budget to spend in these markets.”
Azar says he expects that as his agents develop their own contacts and client base, the level of sales will also increase.
“Today, for example, I can tell you that 30 percent of the agents are performing [at optimum] because the others are still building their database. In 2016, you’ll have 30 or 40 people functioning at 80 percent capacity, whereas they are now at 30 percent. It’s only going to get better from here.
“We have very specific targets for the UAE, GCC, international and investment markets,” he says.
“In Dubai, in volume, the project sales haven’t kicked in and international is about to start. We expect our international and our project sales divisions to actually perform the most under this company. Today’s figures are purely from local sales, which is quite high.”
The agents, in time, will be assisted by the company’s own market intelligence, which will enable them to crunch through numbers, explain the market intelligence and the data and what exactly is happening in each area.
“When someone wants to buy a home, a person is convinced because he likes the building, or he sees it as an opportunity. We’re putting in a system where agents will be equipped with everything they’re going to be doing from a sales perspective, with financial backing on the case they’re selling,” he says.
Azar says there are project sales exclusive listings worth AED8bn ($2bn) that the company hasn’t started selling yet, but has no worries about finding prospective buyers.
He believes that the market, particularly in Dubai, is suiting the company’s expansion plans.
“We’re actually very bullish, not only in the luxury sector. You have to always look at things in perspective. When people are all talking bad news about the market, that’s when you should be getting into the market. Our expansion plan, the reason why I can’t get in faster, is because the market is slowing, and I actually can grow much better and faster. Everybody else is retracting and spending less, trying to limit the damage, we’re actually bullish,” he says.
While the Dubai market is currently experiencing a slowdown, Azar says most companies are going to spend less, and agents are going to be making less money.
“That’s when you actually grow your company. If I was trying to grow my company when the market was flying, I’m not going to be able to attract any talent into my company. In the last three months, we were able to attract four or five people here who we could never dream to have here. The reason being, the market is slow. We’re not actually paying more money, we’re showing them the potential of this company and they are buying into our plan,” he says.
Most of the company’s sales this year have been in the upper end of the market, with a lot of penthouse sales.
“Most of our transactions were above AED10m. 70 percent of transactions were in the AED10-15m [bracket]. We have sold a few homes, mostly in Jumeirah. We sold a AED42m property in Jumeirah on the beach. We had it exclusive and sold it to a Saudi gentleman.
“We were also able to break a [record] price in Downtown — the highest price per sq ft in 2015 in the Downtown area, AED6,250, ten days ago,” Azar says.
While he’s still involved in the banking business, Azar says that he retains only a “very niche” role, working in a specific line of business, and focussing on 30 to 35 clients.
“For me this [Gulf Sotheby’s International Realty] is a business that is complementary because I’ve done a lot of real estate transactions in my career, but more on the investment side,” he says.
For Gulf Sotheby’s International Realty, it looks like a lot more time will be devoted to building the world’s biggest luxury brand, in one of the world’s most luxurious regions.For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.