Deyaar gets busy with handovers
— Developers in Dubai are increasingly diversifying their revenue streams to generate income from property management, hospitality, facilities management, owners association management, etc. Deyaar is one such developer which has tweaked its strategy and now plans to generate a significant portion of revenue from recurring income. Others pursuing a similar strategy successfully include Emaar and Nakheel.
“Linking the real estate element to the hospitality sector is a good idea, not just because of Expo 2020 but also given the diversified economy that Dubai is chasing, especially gearing itself as a tourist destination, will ensure that even in a property downturn, revenue can still come from tourism/hospitality sector,” says Mario Volpi, chief sales officer, Kensington Exclusive Properties.
Currently, Deyaar has projects worth Dh2.7 billion under construction in Dubai. These include the Dh430 million Mont Rose in Barsha South, Dh920 million Atria in Business Bay, a Shariah-compliant Dh420 million hotel and serviced apartment tower in Al Barsha and Midtown in Production City (formerly International Media Production Zone).
Deyaar is scheduled to deliver 500 units in Mont Rose and Atria this year. Of the 297 apartments in Mont Rose, 265 are sold. The two residential towers will be handed over in July this year while 198 units in the serviced apartment tower will be delivered in November. Deyaar has retained all serviced apartments to generate recurring income.
Meanwhile, Deyaar says it has sold 95 per cent of the 219 residential apartments in Atria. Of the 347 serviced apartments, Deyaar has released only 50 per cent to the market and retained the other half. The residential tower will be ready by November this year while the serviced apartments will be handed over by December/January and be operated by Millennium & Copthorne.
Build progress
In terms of construction progress, Mont Rose is 65 per cent complete and Atria has hit 64 per cent.
Deyaar is offering seven per cent guaranteed returns at Atria serviced apartments for 2018 and 2019. The developer targets to have 960 hotel keys by September 2018.
“We are confident that the Dubai hospitality market will pick up by 2020. Our hospitality portfolio will provide a good income stream by 2019/2020. Attractions such as
Our hospitality portfolio will provide a good income stream by 2019/2020 Saeed Mohammed Al Qatami, CEO of Deyaar
IMG World, Dubai Parks and Resorts will attract more visitors and we need supply to cater to this. We will focus on three-star and fourstar hotels,” says Saeed Mohammed Al Qatami, CEO of Deyaar.
Its 400-key Al Barsha project will be operational by September next year. Work is also in progress on 1,237 homes in two zones (two and three) in Midtown while zones four and five are “in detailed design approval phase”.
Deyaar has a land bank of 5.7 million sq ft under various stages of design. These include 800,000 sq ft of gross floor area in Business Bay, 700,000 sq ft at Dubai Silicon Oasis, 1.5 million sq ft at Midtown and a plot in the Lagoons.
It also has a further 2.7 million sq ft in Dubai South, which is likely to house a series of low-rise apartments and Deyaar’s first townhouses.
“We are closely monitoring the markets before a launch. The market is very stable and sales are taking place for units with smaller ticket sizes and right payment plans. In terms of ready units, there is good demand from end-users and investors. There has been a healthy correction in rents and the market has stabilised,” Al Qatami adds.
Deyaar recently raised debt of Dh900 million from banks for its Al Barsha and Midtown projects.