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68 Gulf Property

Few real estate compa-nies have such a finediversified businessstrategy as SelectProperty. The com-

pany is equally focussed ontrading in properties in boththe UK, its home market, andin Dubai, besides also cover-ing the CIS countries. Select

Property is hence reapingthe benefits of selling uniqueprojects, such as studentproperties, in the UK, and ofselling luxury properties inDubai Marina.

Adam Price, Managing Di-rector Middle East, says Se-lect Property is still aUK-leaning realtor as morethan half of the revenues aregenerated from trading athome. However, he revealsthat the firm has “a niceblend of UK and Dubai prod-

ucts. The UK products aregiving us more stability be-cause that is a market whichhas been established sincehundreds of years.” Even ifone were to consider nation-alities, Select Property’smajor buyers happen to beSaudis, Kuwaitis and Rus-sians; and the firm’s plush of-fice in the upscale DubaiMarina is testimony of thefact that they are strengthen-ing their overseas businessby catering to many national-

ities from Dubai.“We are not kind of a prop-

erty shop, we don’t want todo that,” Price explains.“What we do is two-fold:One, we have a strong pres-ence in Dubai Marina; that’sour bread and butter reallywhich is reselling our clients’property off-plan. That’s howour business has grown, infact 50% of it. The secondarea we specialise in is de-velopment of luxury brandsin the UK.”

By Indrajit SenSenior Reporter

Select Property’s VitaStudent a hit in UK, GCCSelect Property’s VitaStudent a hit in UK, GCC

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grated company; so belowthe development arm youhave the sales arm, then themarketing arm, followed bythe rentals and propertymanagement arm. It is alldone in-house. We fully man-age the project, so if you buyone of our student proper-ties, effectively we lease itback from you and we man-age that for 5 years. Andthat’s how we guarantee the7% return. Because if wehave total control of that wecan ensure that the quality ismaintained. We can also en-sure that the rentals have100% occupancy,” Priceelaborates.

He further explains: “Whatwe also say is 7% is the min-imum return. If we achievemore than 7%, we give thisto the investor. It is a nicemodel, it works well.”

The Vita Student brand hasbecome quite popular andhas earned healthy revenuesfor Select Property. The com-pany has sold around 1,300Vita Student units in 3 years.Out of the 9 projects, 8 are

now sold, with the latestlaunch in Westgate, Newcas-tle also being 80% sold.

With regards to the break-up of the sales pie, Pricesays Europe accounts for50%, 25% to the Far Eastand 25% to the GCC. “A lotof our buyers are from theGCC, from Kuwait, the UAE,Saudi Arabia, and the CIScountries (mainly Russia).These are our main mar-kets,” he mentions.

According to Price, theconcept has been well re-ceived in the GCC, fromwhere a lot of students mi-grate each year to the UK forhigher studies. Select Prop-erty has been engaged inmarketing activities in Kuwaitand Saudi Arabia, wherethey recently organisedaround 3 to 4 promotionalshows for properties in theUnited Kingdom.

The strategy seemed tohave worked well for thecompany, as in Kuwait aloneit sold 100 units. The fantas-tic sales response has en-couraged Select Property to

open up a small office inKuwait by Q2 2015 to ‘ex-plore the market further’,Price reveals. He is hopefulof a similar response inRiyadh.

So what success mantrahas Select Property adoptedfor the GCC? “We have ourdistribution channels in theGCC. So we have an officehere in Dubai Marina, an of-fice in Manchester, London,Toronto and a satellite officein Singapore. And now weare also operating in Kuwaitand Riyadh. We want to besure that when we roll out aproduct it reaches all ourcustomers. So it is nice for usbecause it reduces the risk ofreliance on the market.”

So how has the responsebeen for Vita Student inDubai? “It has been verygood. With regards to GCC,a lot of our buyers in Dubaiaren’t just from Dubai alone;they come from Moscow,Riyadh, Kuwait or Bahrain.So locally it has been verywell accepted. So betweenMarch 2013 and now, we

Emphasis onstudenthousingIn 2011, Select Property tookup a project in a segment ofthe UK market, which wasuntouched, yet had very highdemand: Student Property.Price explains: “If you look attypical student accommoda-tion in the UK, it is of verypoor quality. Most placeswhere students live are outof town and they appear likerows of industrial house. Typ-ically up to five people willshare one space, making itcramped up. So we acknowl-edged the fact that there is areal undersupply in this sec-tor. And if you couple thatwith the fact that the numberof international students isrising every year, there is amassive opportunity for in-vestors.”

Select Property thereforelaunched its flagship producton student property named‘Vita Student’. So far, thecompany has launched 9projects under the Vita Stu-dent brand; 3 in Liverpooland one each in Manchester,Bristol, Southampton, Ex-eter, Sheffield and the latestlaunch in Westgate, Newcas-tle. Of these 9 projects, 6have already been handedover and they are all enjoy-ing 100% occupancy. The re-maining three are set to behanded over in 2015-16.

So what is in it for in-vestors, how much will bethe returns? Price says Se-lect Property is offering aunique model whereby thebuyer is guaranteed a fixedreturn. “We guarantee in-vestors a net return of 7%after operating costs. Howwe do that: We have the Se-lect Property group as theumbrella, and below that youhave the ‘Vita Student’brand. It is a vertically inte-

Select Property selling projects on behalf oftheir partners in Dubai Marina

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70 Gulf Property

have sold just under 150 Vitaunits in Dubai, which I thinkis a pleasing number,” Pricesmiles out of satisfaction.

City Suites: Aunique ideaSelect Property doesn’tseem to be contended withtheir success with Vita Stu-dents. Parallel to developingthe vita Student brand, theyare working on anotherunique concept, a luxury res-idential project called ‘CitySuites’. Price explains theidea behind it:

“It is a concept that hasbeen developed basicallyafter looking at the gap in themarket. If you look at ayoung professional travellingon business, who wants tostay in a 5-star hotel but alsowants the benefits of a serv-iced-apartment, City Suitesoffers him that. It combinesthe best parts of a 5-star

hotel and a serviced apart-ment. This means you willhave concierge, 24 hour-se-curity, gym, pool, and a verynice living space. But it won’tbe just like a hotel room, be-cause you will have a sepa-rate kitchen, a dining spaceand the bed separate fromthe other areas.”

But isn’t there enough ofsuch projects/units in Dubai?Price disagrees saying, “Thereason why we are goingafter this project is becausewe feel in Dubai there isnothing that matches this.There are a lot of hotels andserviced apartments, butthere isn’t a concept like CitySuites.”

Select Property is presentlyworking on its first City Suiteproject in a central location ofManchester. However, theyhave begun marketing theproject in the United King-dom and in Dubai recentlyand have already sold 34units so far.

A busy yearaheadThe year 2015 will keep Se-lect Property ‘really busy’with a lot of projects, Pricesays. The company has landbanks in the UK on whichthey have plans for develop-ing three or four more VitaStudent projects in Glasgow,York, Manchester and one inDubai, also potentially one inToronto, Canada. “In termsof Vita Students, that willkeep us occupied for thenext 24 months”, he says.

Besides, the realtor is try-ing to develop a City Suiteproject in Dubai, for whichthey are looking at purchas-ing a plot of land in DubaiMedia City. Price feels therehas been a resurgence of theprimary locations in Dubaiover the past two to threeyears. So Dubai Marina,Downtown and the PalmJumeirah are currently the

hotspots. “I think what is be-coming more evident now isthat there are certain areas,where the price per squarefoot represents good valuefor money. For example theJumeirah Village Circle(JVC) or Jumeirah VillageTriangle (JVT), these are thesecondary/tertiary locationswhich are becoming moreand more popular for in-vestors now. We are actuallylooking at doing a City Suitesin the JVC area, because wethink once the developmentand landscaping of the areais completed, it will becomea very popular area,” Pricestates.

Price also talked about an-other classic resort projectSelect Property is jointly de-veloping with partner SelectGroup in the emirate of RasAl Khaimah called ‘Pacific’.The project is on a seahorse-shaped man-made is-land called Al Marjan Island.“It basically is RAK’s version

“In Dubai, the property market has been apparentonly since the rules were relaxed in 2001. I dobelieve that the Dubai Land Department has put inthe required mechanisms in place now to increasestability. It has reduced speculation. There is goodregulation now on the off-plan projects which limitinvestors selling until they have paid up to 50% ofthe price.I have full confidence in the Governmentof Dubai that they will ensure that the rightmechanisms are in place, to ensure stability.”

- Adam Price,Managing Director-Middle East,

Select Property

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tune of just 2 to 4% over thepast 6 months, is only tem-porary. I think there are moreand more investments com-ing in. With the world-classinfrastructure in place, withEXPO 2020 and with the de-sire of the government to re-ally establish Dubai as theNo.1 tourist destination of theworld, the market can onlygo from strength to strength,”he assures.

Much has been talkedabout the difference betweenthe property markets in Lon-don and Dubai. Most realtorsand brokers from the UKdoing business here tell youthat the London market ismature and that Dubai is not.While property transactionsin London happen after thebuyer has made a well-re-searched decision to invest,property trading in Dubaiwas fuelled mostly by specu-lation up until the recent past,the popular word is.

Price carefully distin-guishes the two markets:“The London market will al-ways be popular. So if youlook at the prices, they arequite high, whereas theyields are quite low. There isno doubt that it is an estab-lished market, it has had fan-tastic capital appreciationover the past two and a halfyears; I think it was 13% lastyear (2013). But now therewill be a slowdown in Lon-don. That is because if youlook at the demographics,there are a lot of Russian in-vestors in London now whoare looking to sell their prop-erty there, due to the fallingvalue of the Rouble (Russiancurrency).”

“In Dubai, the propertymarket has been apparentonly since the rules were re-laxed in 2001. Yes it is a rel-atively immature market.However I do believe that theDubai Land Department hasput in the required mecha-

nisms in place now to in-crease stability. It has re-duced speculation. I thinkthere is good regulation nowon the off-plan projects whichlimit investors selling untilthey have paid up to 50% ofthe price. I have full confi-dence in the Government ofDubai that they will ensurethat the right mechanismsare in place, to ensure thatstability prevails.”

Mid and low-incomegroups in the UAE are ex-panding and will continue toexpand, given the steadyflow of expatriate workers.These groups comprise peo-ple who will naturally investin low-cost housing projects.Thus affordable housing hasgained immense importanceand popularity in the UAE,and builders developing low-cost projects have alsoearned healthy profits fromthem. Considering thechanging dynamics ofDubai/UAE’s property mar-

ket are developers only fo-cussing on luxury projects orare they also building afford-able projects?

“There is an emerging mid-dle class here in Dubai andnot everyone can afford tolive in Dubai Marina or thePalm or Downtown,” Pricefrankly says. He thinks thereis a real gap in the marketand it presents a great op-portunity for developers tooffer affordable housing inthe secondary and tertiarymarkets.

Price feels, “If you look atthe bigger developers outthere, like Emaar andDamac, they too are fo-cussing on the secondary lo-cations. Like I said, there isan emergence of a middleclass or mid income seg-ment. For developers thereis gain in developing a highquality product in secondarylocations and selling that at arealistic price, which pleasesthem and the buyer. g

of the Palm Jumeirah. Wehave 1,400 units being de-veloped on this island. Theprojects is approximately75% sold, because the mar-ket in RAK is quite vibrant.So we are going to re-launchthe project in Q1 2015. Wehave around 250 units re-maining and we will go tomarket with that at a rate ofDh1,000 to 1,200/ squarefeet,” he mentions.

“So quite honestly we arebusy right now. We have theDubai Marina sales (thatthey are doing for their part-ner Select Group), the VitaStudent and the City Suites,”he gasps.

Predictionsabout DubaimarketPrice seems to have goodfaith in the Dubai real estatemarket and he sees it per-forming quite well in the daysto come, as there are geo-political factors that are hav-ing an impact on the market.“I think from the strong fun-damentals you have here,there is no doubt that is a be-coming a popular investmentdestination on a global scale.I think the medium to long-term prospects are verygood. I think it is a safehaven in the Middle East andbecause of political distur-bances in the region, wehave seen a lot of invest-ments from Syria and Egyptin Dubai in the past 12 to 24months.”

However, there have beenreports in the news mediaabout the market softeningand the sales volumes forresidential and commercialunits going down signifi-cantly. Price believes there isno reason to be alarmed. “Ithink with the EXPO 2020 inthe not too distant future, thiskind of price correction to the

The gap in the real estate market in Dubai presents agreat opportunity for developers to offer affordablehousing in the secondary and tertiary markets