(DENNIS B MALLARI)
Hardly a year after it was launched as the wholly-owned real estate subsidiary of the National Bonds Corporation (NBC), National Properties has created ripples in the region’s bustling real estate market by rolling out a number of freehold properties and distinctive financing options. As part of its mission, the company is ensuring good returns for National Bond-holders and privileged financing and buying opportunities.
Can you describe the missions of NBC and National Properties?
The National Bonds Corporation aims to encourage people to make saving a way of life. In a market like the UAE it’s easy for people to spend uncontrollably, but people should realise the importance of saving.
NBC took up the responsibility of helping people to save and experience the benefits of investing in Shariah-compliant bonds. As an inventive for adopting a culture of saving, NBC offers bond holders the chance to win Dh5 million every month, including a grand prize of Dh1m.
As the next step, NBC wanted to provide people with excellent opportunities to invest in the vibrant property market in the region, enabling them to have their own homes. National Properties was launched with this objective.
National Properties focuses on offering distinctive lifestyle choices to the multinational UAE community by identifying gaps in the market and addressing them through developments that combine a great deal of passion in their location, design, architecture and pricing. Holders of National Bonds are given priority to own properties developed by the company.
What support does the company offer to National Bond holders?
We have formed strategic alliances with leading financial institutions to provide mortgages for our projects. In December 2007, we signed an agreement with Dubai Islamic Bank (DIB) to offer Islamic home finance solutions for the purchase of units in our developments.
The agreement extends to all current and future developments of National Properties including Skycourts. DIB will provide up to 90 per cent of the unit price as finance to those wishing to own units in these developments.
This applies to all buyers of our properties including residents, non-residents and all foreigners who wish to own a home in Dubai. We have over 400,000 bond-holders now and they can take out mortgages on their bonds from Amlak, the National Bonds’ strategic partner.
Can you describe the offer Amlak has for bond holders?
National Bonds and Amlak Finance launched a service last December, that allows bonds to be used as a collateral on properties.
The service also allows bond holders to retain their annual returns and access to National Bonds monthly prize draws during the whole finance period. Bond holders will be able to pledge their bonds to secure 100 per cent property financing from Amlak at one of the lowest profit rates in the market.
The bonds can be used as a down payment and will either be redeemed after the last mortgage payment or released to the bond holder upon full payment of the financed amount. National Properties launched Sulafa Towers after this agreement, with a 100 per cent home-financing option from Amlak.
What if a buyer was incapable of continuing to pay? Are buyers allowed to resell their properties?
Yes, our customers have the right to sell the property. For example, we sold Skycourts for price of Dh675 per square foot, but now many buyers are reselling it for Dh950 per sq ft. We want to give people as many opportunities as possible to own homes. Those who resell it will have to pay us a nominal administrative fee.
When will your first project be handed over to buyers?
Last May we started construction on our first project, Skycourts. The Dh1.5 billion project offers 2,500 apartments in six 24-storey towers coming up in the Dubailand Residential Complex. Skycourts residents will have access to all amenities for modern- day city living. We will start handing over units from 2009.
Are you offering National Bond-holders exclusive projects?
Yes, we will be launching our latest project, Flamingo Creek, with an exclusive opportunity for National Bond-holders.
The project will be developed adjacent to the arterial Ras Al Khor Road and will offer a stunning view of the Ras Al Khor bird sanctuary with floor-to-ceiling windows to ensure spectacular views of the lagoons and the canals. Construction work will start soon.
The project will consist of up-market, villa-style apartments and townhouses, set in serene surroundings, with access to all the necessities of urban life such as retail shops, restaurants, health clubs, swimming pools, as well as a school district and the Dubai Opera House.
Can you discuss the other venture that National Properties has launched to manage community developments?
Yes, National Properties launched a joint venture, BCS Strata Management Services, with the Prudential Investment Company of Australia (PICA) to offer comprehensive strata and facilities management services.
BCS Strata Management Services is the first strata and facilities management company in the UAE and is set to become a turning point in the fast-evolving UAE real estate sector.
The company serves as the right channel between home-owners and the government, offering the perfect synergy between all stakeholders in property management.
Strata management refers to the day-to-day running and upkeep of a building or a group of buildings in a development, particularly common areas and facilities often owned and managed by authorised owners’ associations also known as body corporates.
It covers all common facilities shared by owners and tenants such as parking, fire services, air-conditioning, lifts, pools, gyms, walkways, gardens and other common property.
Strata management firms can take care of these shared responsibilities such as arranging for the insurance of a property in case of a fire and preparing details about the obligations of the insurance body in such cases. Another example is ensuring that all end owners pay the due fees, including overseas owners.
Why launch a company specialised in common community management?
There is an increasing demand for comprehensive strata and facilities management services that meet international standards.
Most of the freehold properties are developed in the form of communities. And so there is an opportunity in the market for the management of such common communities.
The market size for the common community management, or what is known as strata management, is currently estimated at $600 million (Dh2.2bn).
Australia is known for its advanced strata management laws. What sort of legislation is necessary to govern such community developments?
With the increase of common community developments, there is a need for laws and regulations that ensure the rights and obligations of all parties involved in a project including master developers, project owners, buyers and end users.
The party that would govern these rights should be an impartial entity to ensure credibility and reliability. These laws are known as strata laws and are implemented by a corporate services authority for common community or strata management.
Dubai is creating strata management laws. What effect will they have on the market?
The Dubai Strata Law, which will be implemented in the near future, will be very similar to those in Australia. The Dubai Strata Law is expected to stabilise the realty market and will be part of streamlining the emirate’s real estate market by adopting international best practices.
Professionally executed strata and facilities management is widely expected to enhance quality of life and investor confidence in the market, thereby providing more stability.
The laws are vital to maintaining a high-quality living environment, the health and well-being of residents, as well as cordial stakeholder relations.
How can the rights of owners be maintained after the developer’s interest in the property has expired?
We are building properties that will stay in excellent condition for 100 years. We are building on land owned by us and we are building good quality and beautifully designed properties.
This is our concept. However, owners can get involved in a sinking fund through a strata management company to help rebuild their properties after the expiration of their properties.
The fund can be financed from annually paid maintenance money by owners. Usually, at the end of a year if any amount remains it will be distributed equally among the owners.
Or, the amount could be deposited in a sinking fund, that aims at saving for rebuilding common community properties after the expiration of the natural lifespan of a building.
How do you assess Dubai’s property market in general?
The prudent vision of the government and the constant follow-up of the market is leading to a proper regulatory framework and increasing confidence in the market, making it one of the preferred investment destinations in the world.
Compared to international prices, those in the UAE are competitive. We have many overseas owners who opt to own property just to enjoy short holidays. The market will continue to be strong and stable.
What are your company’s assets and do you have plans for expansion?
The total value of our assets is more than Dh5.5bn. National Properties is a wholly-owned subsidiary of National Bonds and we are currently reviewing our growth strategy. We are in the final stages of evaluating projects both in the UAE and strategic markets in the region. We will be sharing these plans once they are finalised.
PROFILE: Adel Ahmad Lootah, CEO of National Properties
Lootah received his BSc in information systems from the Devry Institute of Technology in the United States, after which he joined the National Bank of Dubai in 1987.
Management of communities is $600m sector