Even though overseas expansion is on the cards for Omniyat Properties, President and Chief Executive Mehdi Amjad believes Dubai will be the bastion of the company’s success.
“We have to establish our base and fundamentals here before we go out of Dubai. Moreover, we need to ensure we can continue the quality, innovations and principles of the brand Omniyat,” he said.
According to Amjad, retaining talent is the single biggest challenge ahead for the industry, and Omniyat employs what he calls innovative staff retention policies to overcome this.
Amjad, who was recently named Young Global Leader 2008 by the World Economic Forum, spoke to Emirates Business about his expansion strategy, sustainability and the viability of technology.
You have already launched a few projects in Dubai. How many more do you plan to launch this year in the emirate?
We will be launching seven new projects in Dubai this year worth more than Dh15 billion, which will take our combined project value to more than Dh21bn.
All our new developments will be tower projects with a varied mix of high-end beachfront and waterfront residential, hotels, service apartments and commercials, including some retail communities.
I think this combination will raise Omniyat’s portfolio to the next level in terms of sophistication and technology. We are launching projects from Dubai Maritime City to the Lagoons and from Dubai Waterfront to Business Bay.
We are moving from the south to the north and the east to the west of Dubai, trying to expand the Omniyat lifestyle to every corner of the emirate.
Don’t you feel you are concentrating too much on Dubai?
We have always said we have to establish our base and fundamentals before we go out of Dubai. We need to ensure we can continue the quality, innovations and principles of the brand “Omniyat” as we expand outside the emirate.
And I think we are very well positioned now to do that. This year we will be entering Abu Dhabi, Bahrain and Saudi Arabia.
Although we have regional shareholders investing with us through Investate, we will now be entering the above two markets as real estate developers. We will be developing a residential tower in Bahrain and have similar plans for Abu Dhabi and Saudi Arabia.
What will be the size of your international portfolio this year?
It is difficult to give an exact number, but it will be significant in the next three years. Potentially, our international portfolio will be bigger than Dubai.
Your projects are technology-oriented, but are these really viable?
They are extremely viable. We are not saying that our projects are tech-oriented; we say our projects are “innovation oriented”. They are built on a base of innovation, and technology is one of the anchors of innovation.
The objective of innovation and technology is to deliver a lifestyle, that you can enjoy and can aspire to in the 21st century.If you look at our designs, we have appointed some of the top designers from around the world.
If you look at the features in our offices, which we have launched in Business Bay, there are more than 20 technological features that you can interact with every day, from the time you drive into the car park until you reach your office. Technology is integrated in your lifestyle.
Isn’t technology too costly to maintain?
For us, as a developer, it is not about building a project and handing it over; it is about extending the Omniyat experience. In mid-2007, we had decided to enter into the operational and lifestyle management of our properties by the next year.
We now have a dedicated lifestyle facility management team, that provides the operational experience that the Omniyat brand stands for.
Our buildings are designed to operate as standalone buildings. In the first two years, it is our responsibility to offer that experience and more, then they (owners’ association) can choose to go on with us, or choose another operator. It definitely costs more as people are expected to pay more to get such a lifestyle.
As such our properties are 20 to 30 per cent more expensive than any other property on the market. But people are buying it because they expect that lifestyle from us.
However, we are trying to use technology to focus on sustainability. We have been part of that initiation from the beginning, saying technology plays a major role in sustainability as it ensures that you are efficient, and so is the building. Hence, there is less waste.
About a year back you had said you planned to list one of your units. What is happening on that front?
We wanted to start an investment banking company and then list it on the London Stock Exchange. But after further investigation, we saw more value in creating an exclusive club of shareholders that we do business with, rather than listing.
So we decided to form Investate in Bahrain. I am extremely happy with my decision as Investate has reported a $11.5 million (Dh42.2m) profit in the first three months of its operation and has set a target of more than a 35 per cent return on equity this year.
Do you believe in the warehousing strategy?
We apply different strategies for different projects. Since we are development centric, every project is a company for us. Every project has a development director who is like a general manager of that project.
He must do his best to maximise the bottomline and that potentially means selling something off plan, raising debt finance on it, and offloading it on time.We restructured ourselves in 2007 to adapt to worldwide best practices so it allows us to expand internationally as well giving us the flexibility of execution.
How tough has it become to get skilled and trained manpower in the real estate sector?
This is the single largest challenge before the industry. We have really managed to attract the best talent. At the investment bank, we have an independent team of more than 50 people, while we have a dedicated fund management team for our soon-to-be launched fund management company at DIFC.
At Omniyat Properties, we have more than 150 people. We plan to increase that number to 250 by end of the year. I am a big believer in talent and people. And to attract and retain staff we have launched different schemes such as long-term and short-term incentive plans.
Do you feel the UAE needs to harmonise its property laws?
Dubai has certainly evolved in terms of property laws. The government has done very well, especially in the formation of Real Estate Regulatory Agency.
It has put all the laws in place, which encourage and protect investors. I am confident the laws will continue to evolve in the best interests of the region and the country.
How have you dealt with the rising cost of construction? Has it hit your bottomline?
Construction costs are definitely increasing, but our strategy has always been to work with our partners. We have strategic alliances with our contractors and we effectively align our interests with them by locking our costs in advance with them.
The real estate market here is dynamic and I don’t see any major challenges for developers. Although costs have shot up, so have our selling prices that has helped us offset the escalations.
President & CEO, Omniyat Holdings
In 1995, Amjad started Al Masa Computers, his first small business in Dubai, marking the beginning of his distinguished career. His passion for real estate first materialised in 2001 under Al Masa Holdings, which was later renamed Omniyat Properties
Amjad’s technical and managerial achievements contributed to the accelerated growth of this entity to become a major private developer with a focus on intelligent buildings.
Omniyat’s focus since its inception was on developing iconic projects and creating different experiences that touch people’s lives (including futuristic, innovative and high-tech buildings), thus transforming forever what people expect from their future homes and offices.
The creation of Omniyat Holdings reflects Mehdi’s deep appreciation of the entire value chain of the real estate market. Investate Realty was created in 2006 for the purpose of real estate investment banking activities.
Omniyat means “wishes” in Arabic and its vision reflects Amjad’s business initiative to become one of the most respected and successful privately-owned premium developers in the region.