With the real estate industry floundering in uncertain times, a developer with both zero debt and liability could seem like an impossibility
But one of the trademarks of the ultra high-end Al Barari project is its ability to cause disbelief and wreak havoc on well-established market notions.
Indeed, a 287-villa project, valued at Dh15 billion, would seem to make any suggestion of profit-making ludicrous – especially as experts advised a minimum of 3,000 villas were needed to break-even. A decade on and Chairman Zaal Mohammed Zaal's 130-hectare Al Barari development of eco-friendly sustainable communities, complete with plant nurseries, apartments and a cultural centre, has taken shape – and silenced skeptics.
As his son, Mohammed bin Zaal, walks Emirates Business through the project's massive greenhouses that nurture four million plants a year, it is impossible not to be caught up in the family's overwhelming pride in their achievement.
"Eight years before we started the actual project, we began planning," said Mohammed bin Zaal, 26, the company's COO. "Most developers around the world would never consider such a time frame.
"We took a completely different approach. We set up greenhouses and water-polishing plants. We tested and grew thousands of plants. Many times I would ask dad: 'Can we start please? Everything's ready, can we sell? But he would say, 'Listen, nobody's going anywhere. Once you have it all in place and know exactly what you are going to do, right down to the doors and fittings, then you begin'."
Located in Nad Al Sheba and neighbouring a wildlife sanctuary and royal grounds, Al Barari is quite simply a benchmark for real estate development. With 1,800 species of plants carpeting its expanse, villas come with at least a half-acre of fully landscaped plots bisected by a 16.4km waterway running through the development.
"Today, we've proven that you can still make money when you create beautiful areas which are sustainable," said Zaal.
"You can build beautiful communities that are socially nice. You're not impacting the environment and you still make money," said Zaal.
Al Barari doesn't come cheap – even by Dubai's standards. Villas cost between Dh30m and Dh200m, which buys between 11,000 sq ft and 43,000 sq ft of house.
Yet, it is 75 per cent sold, 50 to 70 per cent built and nearly 70 per cent paid up.
The first phase of 80 villas will begin hand-over in June and the project is slated for completion in the closing months of 2011.
"Launching phase two sales for the remaining 25 per cent of the project doesn't make sense in today's economic climate, so completion may move forward by a few months," said Zaal.
Industry lay-offs and rapidly declining construction costs led to Al Barari recruiting 500 labourers over the past few months to boost the pace of development.
"Thankfully, since ours is a project that has kept speculators at bay, we aren't suffering from the credit crunch or any such related issue, said Zaal.
"We do have equity partners who are Abu Dhabi-based banks, but they are strongly backed by the government. We've been lucky."
The family has spent Dh6.4bn on the project so far. "Until a year ago, the project was fully financed by the family. We had no external borrowings. Today, we have the South African consortium Atlantis, ADCB, ADIB and Oman Emirates as minor shareholders," he said.
Initially planned with 330 villas, three revisions took the number down to 287 as villa plot sizes increased.
"You have to adjust according to the market and what it demands. We are very close to our customers, and they asked if bigger plots were possible, so we obliged," said Zaal.
Sales for the villas opened in October 2006 and within a year 170 were sold at an estimated average price of Dh45m. "We stopped sales for an entire year after that. Construction was underway and we wanted the whole vision to materialise before we sold any more," said Zaal.
"We had no need to sell more since all the required funds were in. Since then the market moved twice, three times, so it was a great decision to stop sales.
"When the show villa was completed in May 2008 we resumed sales, and the interest has been astonishing."
Al Barari's commitment to a densely populated garden project forced the creation of three sister companies – Green Works, Sustainable Earth and Second Life – to target specific needs.
"There are no suppliers of plants because there is no demand. Asking for a tree from Malaysia would cost you a fortune. For us to get one tree, make 10,000 more of them from cuttings and plant them in a development like this costs us nothing.
"Today, our greenhouse and landscaping company has a huge demand in Dubai. So we will sell our expertise. We are looking at joint ventures, which we will announce shortly. Our vision is to make the entire region green," said Zaal.
There is no escaping skeptics, even when reality presents a different picture, said Zaal adding that today's critics are people who have yet to see the project.
"They just sit and pass comments from afar. It is a trait here and you just get used to it," he said.
The family's deep involvement in the project stems from his father's passion for plants and his mother's desire for true luxury, which infected all three children, Zaal said. "We've been involved with every single aspect of this project. My mother's literally had sleepless nights about light fittings.
"We all love the project and really want to deliver the project just the way we imagined it."
My entire family is well-travelled. We love to visit exotic locations like Thailand, Vietnam and Africa. We are inspired by different cultures which are reflected at Al Barari.
I drive my favourite car, a Mercedes G-series, when out and about in the UAE.
I am an avid tennis player and have played at a professional level in the UAE and competed in the Davis Cup held in the UK.
Yachts and boat?
If it floats or flies, it's best to use someone else's.