The man behind Dubai’s affordable Housing boom

onstruction and real estate billionaire,  Rizwan Sajan details his journey to the top and where he plans to take Danube Group next (Culled from Gulf Business)

QUESTION: Your story is often described as being ‘from rags to riches’, having started over in Dubai with nothing. Did you ever imagine you would be where you are today?

ANSWER: I moved to Dubai post the Gulf War, in an attempt to reinvent myself and regain all that I had lost in Kuwait. At that moment, investing the money I had wisely, setting up a business and making it profitable was the priority. I was quite sure I would succeed because of my business acumen, the products I was selling and the market conditions, but I definitely did not expect to reach such heights. God has been very kind to me, bringing the right opportunities at the right time that have resulted in all that I have achieved to date.

QUESTION: You have been one of the leading players in the trend of affordable housing in Dubai, are the days of luxury properties numbered?

ANSWER: At present, more developers are leaning towards affordable housing because it offers good returns and there are a large number of buyers in the market that are looking to buy affordable homes. Being the pioneers in affordable housing, we have seen overwhelming demand, which has led us to believe that the demand for affordable homes will continue to increase in the future. The luxury segment definitely does have its own market since Dubai is being inhabited by so many nationalities, but I am sure affordable housing is the future.

QUESTION: Much of Danube’s recent property marketing has focussed on Bollywood stars, has this produced the results you expected and are there plans to change the strategy?

ANSWER: In the gamut of advertising it is quite difficult to measure results, but having a familiar face such as a celebrity does help to build a connect with the audience and in turn draw eyeballs to our campaigns.

QUESTION: In May last year Danube announced plans to launch three to four housing projects annually, do you plan to stick to this goal and could you exceed it?

ANSWER: We try not to be over ambitious when we launch our projects and ensure that we sell one project before we launch another. Moreover, we don’t have a land bank, and have to constantly source new pieces of land to build on. At present, looking at the interest we have garnered through our nine projects, we will continue to stick to our current goal of launching three to four projects a year.

QUESTION: Given the recent downturn in the market, do you believe Dubai continues to be an attractive location for real estate investors?

ANSWER: Dubai has established itself as the centre of the world and connects the west with the east. The recent downturn might have affected the market sentiment but I believe this a temporary phase and every market needs to undergo a correction. In my opinion, Dubai still offers the greatest growth opportunity for many investors and will definitely offer good value in investing in real estate at the lowest price amongst other developed nations.

QUESTION: How have current market conditions affected your development plans and have you been forced to hold back any projects?

ANSWER: Since the inception of Danube Properties in 2014, we have received very good responses and have sold out eight projects and have currently sold 50 per cent of our latest project, Bayz. All our projects are under construction and are progressing ahead of schedule. By the end of this year, we plan on handing over four projects, which are Dreamz, Glitz 1, Glitz 2 and Glitz 3. Dreamz is on the verge of completion and we will commence handovers by next month [July].

QUESTION: Do you have any intention to develop properties outside of Dubai in the wider UAE and Gulf region?

ANSWER: At present, we do not have plans to develop properties outside of Dubai but we are definitely evaluating options to expand our presence.

QUESTION: What are your expectations for this year in terms of your company’s and the wider real estate market’s performance?

ANSWER: The outlook for the rest of the year is looking good and we are expecting to perform reasonably well. Since the last quarter of 2016 business has picked up, especially in the real estate sector. As part of the company’s operations in 2017, we launched two properties valued at Dhs750m ($204m), opened a new Danube Home Store in Oman and a 10,000 square foot business to business facility in Ajman. We intend on launching two more projects this year and the handover of our first four projects.

FG Commences Intervention Program In Housing

The Minister of State, Power, Works and Housing, Hon. Mustapha Baba Shehuri  says that the Federal Government is intervening in the housing sector by establishing housing programs in the 36 states of the Federation.

Mustapha Baba Shehuri disclosed this on Tuesday at the commemoration of the 2017 ‘’ World Habitat Day and World Cities Day’’ by the Ministry with the theme ‘’Housing Policies: Affordable Homes’’ and Innovative Governance, Open Cities’’ respectively.

He noted that the Federal Government was doing its best to create an enabling environment for the private sector to thrive.

He highlighted that the commemoration was focused on affordable housing and transforming the nation into a smart city. He added that priority should be giving to making housing affordable as this will enable direction in the desired transformation of the nation to a smart city.

Reiterating the Ministers statement, Nigerian Politician and Former  National Chairman of the People’s Democratic Party, Senator Barnabas Gemade commended the current administration efforts in the housing sector.

Gemade stated that the administration was the first to recommence National Housing Program at its current scale. Referring to the current policy, he admonished the Federal Government to give more attention to the issue of housing.

Analyzing  the interest rates, he advised the need to revisit dormant funds, citing Pension funds as an example. He explained that directing the Pension Funds into Real Estate investment will certainly bring down the real estate financial cost enabling affordable housing.

He added that there was a need for a deliberate attempt to actually develop funding for  low income housing to reduce interest rates drastically.

Gemade disclosed that cities in the country are currently being planned in a tidier manner. Comparing smart cities and slums, he mentioned the presence of effective security in planned cities. He added that slums and Rural areas suffered unimpeded operations by insurgents due to lack of planning and low security.

He further explained that smart cities today are providing opportunities for better surveillance with electronic surveillance.

He noted that E-development has provided effective security with the availability of close circuits and communication gadgets.

– Miraculous Nwaka

Housing: Anambra govt. to fast track project

Prof. Solomon Chukwulobelu, Secretary to the Anambra State Government said the state would deploy resources to fast track the ongoing National Housing Project (NHP).

Chukwulobelu made this known on Thursday in Awka when he received the Minister of State for Power, Works and Housing, Alhaji Mustapha Shehuri in his office.

The minister was in Anambra on his inspection tour of the NHP sites in the South-East geopolitical zone.

The site consists of a three story block of 24 units, amounting to 72 units for type A being developed by DOCHOB Nigeria Ltd.

According to him, the government will look into the project and provide resources needed, including creation of access road for major impact.

“Anambra state is growing very fast with the influx of both civil servants and public sector’s investors as well as other people.

“A few years ago, rented apartment in Enugu was much more expensive than Awka and today the reverse is the case. The same applies to Onitsha and Enugu.

READ: Tax: FG goes after 500 owners of overseas property

“There has to be a sustained way of housing development, state government has tried to do that in the past but no money. Now that the federal government wants to intervene, we will support it,” he added.

He further said that the state government was into Public Private Partnership (PPP) to tackle housing challenges but it was expensive because of the profit orientation of the private sector.

The SSG urged the contractors to utilise the dry season and the grace of extra months to fast track the construction.

READ: Plateau Youths to submit open grazing prohibition bill to Assembly

He noted that the state government was projecting 10,000 housing units to meet the housing needs of the people.

Ealier, the minister noted that the ministry has come up with some policies to enhance housing development in the country.

He said that the ministry would not hesitate to fund the project.

Commending the Anambra state government for providing land for the housing project, Shehuri congratulated Gov. Willie Obiano on his re-election at the just concluded state election.

“His Victory shows the acceptance of Anambra people.”

READ: The Imperative of having Federal Ministry of Housing and Urban Development

Mr Emeka Ofor, Commissioner for Housing and Urban Development of the state, describe the project as an intervention at the right time which aimed at curbing the housing challenge faced by the citizens.

“This is the first of its type in our state and at the end our people will benefit immensely and be integrated.

The minister also visited the project site located in Isiagu, Awka where all raft foundation beams have been completed despite the challenging terrain.

Source: PM News Nigeria

How construction, real estate can drive growth, by experts

Worried by the decline recorded in their sectors in the last one and half years, stakeholders in the construction and real estate industry have suggested ways out of the woods. DAYO AYEYEMI reports
While the dust raised by the 2017 third quarter data on Nigerian’s Gross Domestic Product (GDP) published by the National Bureau of Statistics (NBS) is yet to settle, continuous decline in the real estate and construction sectors of the economy has become a source of worry for practitioners in the built environment.

Some of them, especially developers, builders, engineers, city planners and investors alike, who have expressed their concerns, have proffered solutions.
Speaking with New Telegraph, they canvassed for injection of capital; payment of huge debt owned contractors by government; institutions and structures that would ginger emergence of private businesses, attraction of institutional and foreign businesses into the country as guidelines.

The latest NBS report had shown that growth in the construction and real estate service sector had sustained decline in the last one and half years.

According to the report, the real growth rate of the construction sector in the third quarter of 2017 was recorded at -0.46 per cent (year-on-year), higher by 5.67 per cent points from the rate recorded a year previously, but -0.59 per cent points lower than the preceding quarter.

The report also showed that in the real estate service sector, which tracks the sum of fees for services rendered through data retrieved from tax authorities, real GDP growth recorded during third quarter of 2017 was -4.12 per cent, also lower by -0.59 per cent points relative to second quarter of 2017.

Reasons for decline

Analysts have attributed the decline to worsening economic environment due to falling oil output and restricted access to forex.

They noted that real estate and construction sectors did not buck the trend either, having been in free fall since last year, when the Central Bank on Nigeria published a list of 41 items that were invalid for FX.
According to analysts, most of these banned items were real estate/construction sector related, making the ban to exacerbate an already slowing sector, as most of the materials required for construction in Nigeria are typically imported.

“Making things worse, restricted access to forex and increased all around costs have pushed inflation to 11 year highs at 18.33 per cent. Coupled with negative GDP growth and increasing unemployment, a recipe for stagflation has been created,” they said.

Ongoing developments

However, In the institutional/commercial real estate space, the experts noted that multiple developments were preparing to or have broken ground over the past three quarters, especially in Victoria Island and Ikoyi.

“A few of these include the Nigerian Deposit Insurance Corporation (NDIC) headquarters, Centex Residential Development, Greystone Tower, VMP III, DSPDC development and the new Diamond Bank headquarters among others,” they said.

They attributed ongoing construction activities of the buildings to developers and investors’ insistence on ensuring that the rising cost of construction does not stop them from building already conceptualized projects that have secured funding.

They added: “This is because if they do not begin building now, the rising costs could mean that the (not drawn down) funding secured to build, may be unable to complete it.”

Experts’ view

Speaking on the development, First Vice President, Nigerian Institute of Town Planners, Mr. Toyin Ayinde, said that one of the solutions to stimulate growth in the sector was to find out what makes construction and real estate thrive globally.

He said: “It has been discovered that growth in middle class population and retail activity are often responsible for demand for quality housing units, as well as infrastructure-enabled industrial parks and development zones like free trade zones (free zones).”
He pointed out that the real estate and construction sectors were being driven by emergence of private businesses and attraction of institutional and foreign businesses into the country, while local established businesses continue to flourish.

“The answer would range between a shaky “yes” and an affirmative “no.” So, you would imagine that a decline is inevitable,” he said.

To engender growth of the sector, Ayinde warned that unless the nation makes the enabling environment possible through a review of policies in these areas, investors would keep shying away “even when the real estate sector is acknowledged to be a good hedge against inflation and that it is a major employment generator.”

Principal Partner, Akin Olawore and Company, Mr. Akin Olawore, stated that injection of capital remained the main issue in construction and real estate sectors to deliver economic activities and growth.

According to him, the market needs financial support in terms of long-term low interest mortgage to stimulate supply and open up the entire construction and real estate sectors value chain.

“Obviously, the real estate market segment that can help drive growth requires heavy capital,” he said.

Olawore stated that enduring structures and institutions were required to drive private sector capital to the market, adding that the multiplier effect of these would grow the economy exponentially.

Commenting on the NBS’s report for third quarter of 2017, Past President, Nigerian Institute of Building (NIOB), Mr. Chucks Omeife, said that though it was very disheartening but it is also very factual in all respect, being the reflection of the sectors’ status since 2016.

He noted that the prevailing economic situation had made investment and new development in the built environment very difficult.

He said: “There is a lot of fear and trepidation as to unpredictable direction of the economy, which has remained comatose and has negatively impacted on Nigerians’ purchasing power.
“It’s only when an economy is buoyant and immediate survival needs have been met that the issue of shelter becomes important to a lot of people.”

However, he pointed out that the situation as presently seen had been very unpredictable as investors wanted a level of certainty in the nation’ s economic direction before investing.

To act as a catalyst for growth in the sector, Omeife stated that the government would need to pay off substantial debt owed to local contractors and also embark on the development of infrastructure projects that are yet to commence.
According to him, payments to local contractors and new projects could pump funds into the sector and assist in high reduction in the level of employment, which is very high at the moment.

“If this is done, some level of activities can be activated and the sector will gradually grow and start to contribute positively to the nation’s economic growth,” he said.

Last line

Construction and real estate sectors are engines of growth in any economy. The Federal Government must deliberately create policies to attract private businesses and institutional investors to the sectors to create jobs and generate economic activities.

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