The success story for India’s leading property developer has only just begun in Dubai. The 90-storey 23 Marina – billed as the world’s tallest residential tower – is an emblem for what Darshan Hiranandani is striving to achieve in the emirate.
Future directions include hospitality, healthcare and education – areas Hiranandani Group operates in “at home” in India.
“The idea behind setting up shop in Dubai was to learn the speed of execution and quality. In India we have developed buildings that have not been more than 40 storeys high. So for us Dubai is cutting edge.
It allows us to bring in the best of construction consultants and contractors from across the world,” said the managing director of Hircon International, a sister company of Mumbai-based Hiranandani Construction.
His passion for real estate is evident from his initiatives. The scion of the Hiranandani family is already planning his next projects, with Business Bay and The Lagoons being the preferred locations. “We have secured land in Business Bay and are negotiating for land in The Lagoons. We will launch our fourth project in February,” he said.
Priced at Dh20 million, the Business Bay project will be a high-end residential tower. “There will be only 16 apartments and on the day I launch it 16 of my friends will be waiting to buy it,” Hiranandani laughs.
Emaar Properties, Damac Properties, ETA Star and Trident International are some of the developers operating in the luxury or boutique apartments segment in Dubai. This segment offers top-end products, which are significantly lower-priced than those in London, Los Angeles, Singapore or Hong Kong.
With a Masters in business administration from Rochester Institute of Technology under his belt, Darshan began working for the Hiranandani Group while attending high school and college in India. His deal-making synapses started firing early, when at 17 he launched a go-carting track and family entertainment centre in Mumbai.
“The family has always been in the real estate business and my father has been pioneering it in India. When I was abroad, I did have unlimited options.”
In 2004 Hiranandani returned to India to join his family business. “I love real estate – I find it to be one of the most pleasurable businesses in the world. You get to see something grow tangibly in front of your eyes and that can give you a lot of satisfaction,” he said.
He, however, believes being a high-end developer is not an easy job. “When you are [operating in] high-end real estate you have to think of [things] people never thought they wanted and you have to create things that are out of the ordinary.”
Before the year ends, Hircon will announce its entry into the UAE’s hospitality sector, with a war chest of $1 billion (Dh3.67bn). The company plans to build six five-star hotels in Dubai in the next four years.
The sector is one of the UAE’s fastest-growing, with more than 100,000 hotel rooms available by 2010, up from the current 42,000, according to Dubai’s Department of Tourism and Commerce Marketing.
The emirate will have 354 hotels and 134 hotel apartments by 2010, while the department estimates tourist arrivals in Dubai will reach seven million by the end of this year, up from 6.5 million last year.
This figure is expected to reach 15 million by 2010. “We are aggressively going to get into the hotel business here. We have found the right brand of management,” said Hiranandani.
Role models for the 26-year-old are his father, Niranjan Hiranandani, and His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.
“My father always had a vision of how he could create something really big and he did that with almost no money in his pocket. Sheikh Mohammed has literally created demand out of sand. He is a role model for everyone in the world.”
Hiranandani says he is extremely optimistic about the new regulations announced by Dubai’s Land Department, which, he believes, will continue to fuel the recent increased demand experienced in the real estate sector.
“Real estate is extremely well regulated in the emirate. However, you need to continually move and change with the times. I think it is not about the law, but it is the way it is implemented. The thought process behind all laws is very positive.”
Hircon International is in talks with banks in the UAE to fund its expansion. “We will raise funds through a combination of equity and local debt. We are in talks with four to five local banks,” said Hiranandani. Issuing shares to the public is not an option for the moment, however.
“Selling equity is very expensive. In the Hiranandani Group, we have not given up a single stock of equity and are raising funds through bond offerings, but we evaluate such decisions constantly.
“It is a matter of how much you can sustain your growth without selling stock. If we can grow to 250 million square feet by March [without selling shares], that is very good.”
23 Marina is the tallest residential tower because it is commercially viable at that location, believes the developer of the property.
“If we went any taller it will be significantly more expensive in cost per square foot and if we went lower it did not change much. So it was the exact height where it was perfectly economical for us,” said Hiranandani.
Construction of the 90-storey tower is on schedule for completion in mid-2009, he says.
“More than 90 per cent of the apartments have been sold. One penthouse, however, will remain unsold because I am going to stay there,” said Hiranandani.