Sobha to break ground on Umm Al Quwain project in June

Sobha to break ground on Umm Al Quwain project in June

United Arab Emirates, February 1, 2018

The Sobha Group will break ground on its $4 billion lifestyle project, Firdous Sobha, in Umm Al Quwain by June this year, says P.N.C. Menon, chairman.

The mixed-use project, a joint venture with the UAQ government, will include around 650 residential units, five hotels, waterways and a golf course. The price for units will be pegged at an average of Dh500 per sqft. Sales will likely be launched later in the year.

The community will be connected to the mainland via a 1.1-kilometre bridge, work on which will also start by mid-year. The project has a development timeframe of 10 years.

The master planning for Firdous Sobha is complete. 'Our main customers will be people who own yachts. Most residential plots will allow berthing of the yachts in the backyard. We are trying to create something unusual, even by the standards of what you see in the UAE,' adds Menon.

'We will not be using more than 30 per cent of the land, and the rest will be given to water bodies and a golf course, either 9- or an 18-hole,' informs Menon. 'We will not build all the 18 holes together, but go with nine first and the rest when the full development happens.'

Meanwhile, Sobha Group aspires to be ranked among the top five developers in the UAE.

'In the UAE, there are almost 60 serious players in the property market and we aim to be among the top 5. We can do it with our delivery capability and being completely backward integrated,' observes the chairman.

The developer insists it has sufficient land bank for the next seven to eight years in Dubai. This takes the form of the $4 billion Sobha Hartland and the $8 billion District One (a joint venture with Meydan) - both in MBR City.

'Our financial exposure on these is $8 billion and that is a substantial one for any private developer in a single market,' adds Menon.

Sobha says it has sold 50 per cent of whatever has been launched at Hartland. It has plans for a 73-storey mixed-use tower (Sobha Signature) on a waterfront plot in Hartland. These will be furnished apartments that will be managed by a global hotel operator. 'We have not decided when to launch the tower. That will be dictated by market conditions,' remarks Menon.

The developer plans to get more active in real estate investment this year to create recurring revenue. It will lease out a community mall - with a GLA of 108,000 sqft and to be ready by 2020 - at Hartland. The group intends to avoid foraying into the hospitality industry for now.

'We will not feel confident competing with the giants who manage more than 600 hotels in their individual networks. The returns are still good even if you build a hotel and then lease it out. Mall management is not as complicated as operating a hotel. The returns could be 17 to 21 per cent if you are able to do it properly,' explains Menon.

Meanwhile, in India, the group has been ranked as the number one developer for the fourth year in a row. The group currently does sales worth of about Rs30 billion annually. They aim to increase it to about $1 billion within five years.

As part of its plans to become a pan-India player, Sobha Group is on the lookout for a prime plot in Mumbai. 'We hope to add it to our bank by the end of this year. We will be in Trivandrum soon as well,' says Menon, adding that the group has enough land bank in India for the next 10 to 15 years.

khaleejtimes