Due to the success of the sales of the four buildings of the Jumeirah Business Centers (JBC) project, the developer Al Fajer Properties launched the fifth building, JBC 5, which was fully sold as soon as possible. Dr. Shahram Abdullah Zadeh, CEO of Al Fajer Properties, told our magazine about the reasons for the popularity of the Jumeirah Business Centers project and what makes it unique to investors, including from the CIS countries.
Since the introduction of the first two buildings of JBC 1 and 2, your company quickly expanded its portfolio with two new ones - JBC 3 and 4, recently adding the fifth one - JBC 5. Were these your initial plans or was this a response to high market demand?
The market has taught us a lot. Today we cannot ignore the fact that investors are better informed than developers: they thoroughly know the situation on the market, have a detailed idea of each project, and perfectly understand the pros and cons of each offer.
We always listen carefully to customers who, for al Fajer Properties, are the primary source of market feedback. This is part of our corporate policy. The decision to build JBCs in Jumeirah lake Towers (JlT) was just made on the basis of consumer research: according to the market, Jumeirah lake Towers is the most attractive for investors from all Dubai projects. And this is not surprising when you consider that JlT has such advantages as a well-thought-out infrastructure, convenient access to the most important transport routes, proximity to the main business and leisure centers of Dubai and others. at the same time, Nakheel and the management of the Dubai Multi Commodities Center free economic zone, under whose patronage the project is developing, do not rest on their laurels and constantly introduce innovative ideas.
The first two towers - JBC 1 and 2 - were sold immediately after launch. therefore, we decided to further expand the JBCs brand and bought three additional building plots. Of course, we were going to expand the project, but, frankly, no one expected that all our projects would be concentrated in one cut. We simply always follow the wishes of investors.
Recently, the market is increasingly focusing on commercial real estate. Will this lead to its overflowing with office space after the completion of all announced projects?
Indeed, several projects have been announced recently, but the main question is whether they are as attractive as the Jumeirah lake Towers? Very often in projects the infrastructure was not initially thought out, which leads to delays in commissioning. Location may not be the best either. It happens that the buildings in the project are too close to each other, which is always visible on the general plan. All of these points are serious flaws.
In turn, the development of Jumeirah lake Towers is located inside the largest Dubai freehold real estate area, which includes the most prestigious residential projects worth billions of dollars: the famous "palm trees", Dubai Marina, Jumeirah Beach residence, Emirates hills, Jumeirah islands, Jumeirah Village, Jumeirah Park, Discovery Gardens. The area consists of 90% of residential real estate with freehold rights and only 10% of commercial properties located in the Jumeirah lake Towers development. It is logical that people who live in these areas will not want to spend time standing in traffic jams to get to the office and back. Therefore, the building location already guarantees a tremendous demand for office space.
At the same time, Jumeirah lake Towers is a free economic zone.
Construction standards are also important and we are proud that several famous buildings constructed by our subsidiary construction company are successfully operating in Dubai. For example, the hotel complex Al Murooj Rotana.
Our company also pays serious attention to the management of sales of space. In my opinion, many cutters are unfair to the residents of their buildings, selling retail space to anyone. As a result, there is a danger that all the shops in the building will sell identical goods. We guarantee that in each of our buildings there will be a variety of shops, restaurants and services.
According to the latest data, today Dubai needs 8 million square meters. ft of office space! And this figure is growing day by day.
It is incorrect to assume that all recently announced commercial real estate projects will be completed at a time. The most interesting thing is that there are very few contracting companies on the construction market, and any project not only needs to be announced, but also built. and there is no one to build ... But this problem does not threaten us, al Fajer Properties and al ahmadiah Constructing Co are regular partners.
During the December Cityscape exhibition, you sold 75% of the floor space of the fifth building of JBC 5. What makes your projects more attractive than those located nearby in the same building?
In fact, we sold 100% of the area, not a single empty object remained. I think that the main factors of the attractiveness of our project compared to others located nearby are a detailed study, a wide range of additional services in buildings, an exclusive design, a guarantee regarding delivery dates and unique financing opportunities. add to this the license of a company of a free economic zone, which every investor can get.
We guarantee a minimum rental return of 10% annually. if the investor wants to sell his property, we will definitely purchase it.
I am very proud that most of our customers who bought office space in JBCs leave them to themselves: in the secondary market, our properties are practically not found. This confirms the confidence of investors in beneficial cooperation with us and in receiving good returns over time. Since the announcement of the first phase of the project, to this day, the cost of space has increased by 50-60%.
What stage are your business centers at the moment?
In the coming weeks, zero-cycle work will be completed on the construction of the first two towers - JBC 1 and 2. Then it will take 20 months for them to be ready completely. Three subsequent buildings - JBC 3, 4 and 5 are at the zero-stage work stage; The start of the erection of the building’s body is planned exactly four months later.
In any case, in accordance with the contract, we are responsible for non-compliance with the deadlines for the delivery of objects and if this happens, we will pay investors monthly compensation. therefore, it is in our interests to do everything on time.
What are Al Fajer Properties plans for the future?
Today, our investment in the Jumeirah Business Centers project exceeds 2.6 billion dirhams, and we are already negotiating the purchase of four additional land plots in the Jumeirah lake Towers project.
We are also working on two towers on the Sheikh Zayed Highway, which do not give full ownership to foreigners. One of them will become a five-star hotel for business people, the second is located next to the giant Burj Dubai and is designed for exclusive offices.
We are working with great interest on new proposals and projects.
Tell us about the financing program developed by your company specifically for Russian-speaking investors ...
Russian-speaking investors have always been and remain an important and valuable segment for our company. We developed a financing package together with investors, so it is not surprising that it was enthusiastically received in the countries of the former Union.
The proposal is that the investor must pay 30% of the value of the object during its construction, 10% - after commissioning. He can return 60% of the cost to us within 10 years, in parallel using his office.
Such a scheme is called "rental with subsequent ownership" and has proven itself because it offers the most profitable return on investment. Given the cost of renting premises in our buildings, 60% is equivalent to rent for three years. This offer is very limited in time, so you should hurry up with your thoughts.
