Interview: Mohamed Khalifa Al Mubarak
How can developers weather the cyclical slowdowns in real estate markets?
MOHAMED KHALIFA AL MUBARAK: Keeping abreast of changing market dynamics is essential for any developer, especially during times of slowing activity. Having a deep knowledge of customers and their aspirations also helps in identifying the right properties to sell to the right people at the right stage of the industry cycle. Over the years we have remained nimble enough to tailor our real estate offering to the changing needs of markets and investors. Another important aspect for developers to consider during a slowdown is the quality of their real estate product. We have focused on developing destinations and communities such as those on Yas Island, Al Raha Beach and Al Reem Island. It is this unrelenting focus on quality that builds trust with our customers, and fosters brand loyalty regardless of the economic backdrop. While there are plenty of strategies to deploy during different stages of an economic cycle, there is a lot to be said for maintaining a clear and steadfast customer focus. A good example of this is our move into the mid-market real estate segment. We recognised the untapped potential of this type of product, and moved swiftly to deliver on this shift in demand. Shams Meera, our first mid-market offering, was launched in 2015 and our latest Reem Island project is targeting a further 1200 units to be completed by 2020.
What are the differences in the fundamentals governing real estate markets in Abu Dhabi and Dubai?
AL MUBARAK: In terms of real estate, you cannot really compare Abu Dhabi’s market to Dubai’s market. The fundamentals of each emirate are very different. What I can say about Abu Dhabi is that the underlying fundamentals remain robust. While there are signs that lower oil prices have impacted some parts of the economy, crude prices play a role, but do not set Aldar’s strategy. The fact that government spending on high-profile projects like the Midfield Terminal Building and Louvre Abu Dhabi has continued are indicative of Abu Dhabi’s commitment to long-term growth. From an investor perspective, the climate in Abu Dhabi continues to improve. The introduction of the new real estate law has been transformational in this regard. Escrow accounts, certified construction milestones, clearer details related to service charges, tighter requirements on what developers must deliver and more stringent performance requirements are all examples of how this legislation makes the off-plan sales process much more transparent. All of these factors help to build customer confidence in the Abu Dhabi real estate market.
How do you rate the success of Abu Dhabi’s new real estate regulatory framework?
AL MUBARAK: The introduction of the new real estate law at the beginning of 2016 has proved a huge success. Any legislation that creates a more stable and professional property market for owners, tenants, developers and investors should be encouraged. In my view, it is only by enhancing industry standards and regulation that we can create an even more attractive real estate investment proposition that benefits everyone. Since our inception we have been incredibly fortunate to work alongside the government of Abu Dhabi, often acting as the voice of the private sector. Our involvement in the establishment of the real estate law underscores the importance of this partnership. At the end of the day, such a framework helps create an environment that facilitates innovation, collaboration and prosperity.
What is the appeal of a residential zone?
AL MUBARAK: The appeal of a residential zone for developers is actually very straightforward: easier start-up processes, smoother labour and immigration procedures and 100% ownership for all nationalities. Looking to the future, we continue to see strong demand for high quality homes, offices and leisure destinations – be that in luxury, or mid-market products.
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