Real estate market unlikely to suffer due to rising costs
Rising costs will have no significant impact on the property market, especially the UAE that has a very stable economy, a senior Snasco executive has said.
Do you plan to acquire more land in the UAE and which emirate do you plan to focus on?
The UAE as a whole continues to be a land of opportunity, given its stability, sound fiscal policy and growth potential. We don’t, however, limit our investment strategy to any emirate, rather by growth potential and usage type.
Currently, we are focusing on our Sharjah project, as there is much to be done in terms of planning and building infrastructure there. Our biggest current project is the Sharjah Investment Centre.
Our investment strategy is multi-faceted. We either enter multi-billion-dollar projects through joint ventures or we fully own or develop. Currently, we have either signed or are in the final stages of negotiations for projects in the UAE, Saudi Arabia, Jordan and Algeria, which we expect to finalise during this year.
There is a lack of talent and experienced people in the real estate sector. Have you been able to overcome this problem?
You will find that the issue of talent is a global challenge across all industries. Although populations are growing, there are limited numbers of specialised, experienced professionals; and the same is certainly true of the property industry and all its associated sectors.
Are you planning to raise debt for your multi-billion dollar projects?
These are strategic decisions that take place only after we see scenarios presented to us in feasibility studies and discussing the same with our board of directors and/or partners in any given venture. We have a diverse portfolio and sources of funding reflect that diversity. It is early to discuss private equity funds.
Do you believe it is the right time to borrow from the market since the US Federal Reserve has cut rates further?
Certainly, if borrowing is part of a company’s business requirement, the current situation is more favourable as it costs less for an enterprise seeking to manage its cash flow.
Is incorporating high-end technology a way to overcome competition or a way to market your product?
Technology is a means to an end so we certainly believe in applying technologies that would make our clients’ life or work experience more comfortable. We also use technology to ensure more environmentally safe building processes.
Some developers have built high-end towers with almost futuristic technologies and this strategy impacts price as well as whom one targets. There will always be an audience for such properties; and we have not ruled out such an approach.
As the world becomes a smaller place in terms of modern technology and international business relations, there are too many factors contributing to the cost of running any business. We may see increases, since costs are on the rise in every economic sector across the world.
Any plans to acquire international companies as your rivals have done?
We have a clear vision and business philosophy regardless of how others may act. We have an expansion strategy in place, and are exploring opportunities in Jordan, Abu Dhabi and Algeria. We will invest whenever and wherever we see opportunities that serve our goals as well as add value to our investors, end-users and the community.
Do you expect the regional property market to cool down over the coming years?
There is still an enormous amount of room for further development across the GCC, including the UAE. In years to come, the market will mature in all sectors, from more sophisticated mortgage financing options to consolidated brokerage firm mergers. But this means that the market will restructure itself, not slow down.
Is harmonisation of property law an urgent need in the UAE?
The question of property law is a complex one as it covers both commercial and civil matters. It is clear that emirates such as Sharjah, Abu Dhabi and Dubai are leaders in exploring this matter.
Since getting good contractors is becoming a difficult task, do you plan to start your own construction company?
Qualified contractors are always ready to work with companies that conduct themselves professionally, so we have had no issues in this regard as our relationships and reputation have helped us ensure positive commitments from our colleagues in the industry.
What is the status of your projects in the UAE and do you expect any delays?
We have been fortunate in this regard, generally due to having done the necessary research before launching any of our projects and having planned realistically.
Would you like to share your success with the public by launching an initial public offering?
We constantly evaluate our business strategy, but have made no decisions in this regard. Nevertheless, it remains and option for us as we believe in the principle of partnership and providing others with the opportunity to share in our growth and success.
Saleh Al Sorayai
Chairman of Snasco
Saleh Al Sorayai, Chairman of Snasco, is a prominent Saudi businessman. He returned to Saudi Arabia in early 1980s and started his business after graduating from the United States.
He is now planning to take Snasco to new markets and develop mega projects that will benefit the entire community and the region as a whole.
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