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Pearl Dubai, a real estate company based in the emirate, is developing its reverse namesake project, Dubai Pearl. Being built with the Dubai Media and Technology Freezone, the mixed-use project will include residential, commercial and hotel space.
Emirates Business spoke to Chairman of Pearl Dubai Abdul Majeed Al Fahim (pictured above) about progress on the project, which promises to be more than iconic. Al Fahim also talked about the property market in the UAE and the challenges of keeping one step ahead during a boom.
How is work progressing on Dubai Pearl and have the enabling contracts been awarded?
We have demolished the old building and started with the land levelling work. We did shortlist a lot of contractors for enabling jobs alone. But now we have selected our contractors and the contracts will be awarded soon. We are progressing very well with our timetables and at the moment we have a lead of 11 days in certain areas.
Getting quality contractors on board is a difficult task. Did you face any challenge on this front?
We are looking for the best for Dubai Pearl. Today, it is certainly a contractor’s market and it is they who are trying to select their clients. We haven’t faced any problems in attracting quality contractors as they value our relationship and know us as good clients. Moreover, Dubai Pearl is a prestigious project and a lot of contractors desire to be part of this landmark development.
Have there been any modifications or changes to Dubai Pearl’s master plan?
The main buildings remain the same, but the podium buildings have been modified, making it look even better. We have utilised only 52 per cent of the land for construction from the total area, while the remaining 48 per cent is open area. Basically, we have increased the open space and landscaping area in the project.
Haven’t you kept a lot of open space, considering the value of land in Dubai?
There is big value for open space. When you are creating something like Dubai Pearl, you have to give that open space to people because it creates sustainability. We are creating a “living city”. We are located in Tecom, which is master planned very well.
We believe in space that creates value. We did mention in the past that Dubai Pearl is a highly efficient building, with high importance being given to space management. Considering the earlier master plan, we have increased open space from 40 per cent to 48 per cent. Since we are utilising the top of the buildings as open area, in total we will have 60 per cent designated as green environment and open space.
You advertise a pedestrian friendly, walkable and climate-controlled city. What does that mean?
It is all about “brilliant” living. We have to cater to the needs of the people who will be living and working in this environment. Dubai Pearl will be addressing the needs through technology.
Do you believe that there is an urgent need for the UAE to harmonise its property laws?
Each emirate is doing its best to suit the interest of its clients and people. Uniformity is good as it makes things easy. But at the same time, this little bit of flexibility that exists among different emirates is creating a good challenge for innovation and creativity. Dubai initiated laws for the sale of real estate to foreigners, then other emirates observed it and now some of them are agreeing to be flexible in some areas where they were not.
What is your take on various property laws passed by Dubai?
The escrow account law is excellent and it mitigates a lot of risks for the investors as well as the end-users. It eliminates some of the not so serious developers who have created the speculation bubble. And we did open our escrow account before the launch of our project.
Do you believe in incorporating high-end technology in a project? Does it offer an edge over the competition?
Absolutely, we are working extremely hard and are inviting international corporations to address the technology needs of Dubai Pearl. We want to offer WiMAX and fifth generation technology to our clients. I am hoping that by 2010, as we are completing in 2010, we will be incorporating 7G technology.
Getting experience and talented people in the real estate sector is becoming difficulty. Are you facing any problems?
Fortunately for me I have been able to attract good people around me by luck or by desire. We have to be market competitive and strike a balance between the value of people and cost. In a growth environment, you will always be in such a dilemma.
Where do you see raw material prices going this year?
We have seen significant price increases in building material in 2007 and the beginning of 2008. But what has scared me is the significant price increase in commodities this year, specifically foodstuffs. However, I believe that all building materials are highly priced. A lot of developers and contractors are under time pressure and are absorbing the increased costs. Overall, I expect building materials to go up by four to five per cent, but prices of foodstuffs will go up by 15 per cent.
Has the rising cost of building materials and manpower hit your bottom line?
As other costs have increased, we have been compensated by an increase in unit prices. So the percentage of return has not been affected. As for the returns on investment, our initial investors are getting back good money as the property has appreciated due to its location and the quality we assure.
How will Dubai Pearl market itself when you have several iconic projects in the same neighbourhood?
Functionality is more important if you look in the long term and one wants to live in a place that offers a better standard of living. Dubai Pearl is a unique project and not just iconic. And we are going to work and maintain it as unique for ever.
Do you plan to replicate the project in other parts of the world?
We have been approached by companies to duplicate Dubai Pearl in China and South Korea. People are coming to us and asking us to go in with them in joint ventures to produce similar projects. My vision is to take the Dubai Pearl brand overseas. Why not to duplicate it in environments where it will be appreciated?
How do you plan to raise funds for the project?
We have an equity investment of $500 million in the project. We are already in negotiations with some banks for syndicated loans and our talks are progressing quite well. We do have plans for sukuk and it will come as time passes.ÿ
Abdul Majeed Al Fahim
Pearl Dubai Chairman
As chairman, Al Fahim drives Pearl Dubai’s long-term strategic objectives and provides leadership to the board of directors. In addition, he heads Al Boraq Investments and Development, Colliers International, Daman Investments, Industrial Investor Group, Buildan Development and The National Investor Group. Previously, Al Fahim was executive director of the private office for a member of the Abu Dhabi ruling family.
He has also held several positions at leading financial institutions in the Middle East, as senior management member in National Bank of Abu Dhabi, vice-chairman at Islamic Financial Consultancy (Bahrain) and head of projects and direct investment at Abu Dhabi Investment Company. He holds a Master’s in Business Administration from the University of Toledo, Ohio, United States.
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