Face to face: Fred Durie, Nshama.
In spite of affordable housing being a much-needed option in the property segment, developers continue to launch luxury residential projects across the UAE - in an already crowded market. In fact, there are only around 800,000 affordable homes in development in Dubai, and very few "inventive" options in the mid-market segment, according to Fred Durie, the chief executive officer (CEO) of Dubai-based property developer, Nshama.
In light of this, the company has decided to bring to the city a brand new "co-living and co-working" concept that aims to change the face of the property game in the region. Nshama's mixed-use UNA property, according to Durie, adopts a new model that will offer a fresh concept for the market and allow Nshama to provide another affordable option to its customer base.
"UNA is based on the co-living concept. It is something new to Dubai that is already very popular in England, Japan, and in Europe, [allowing] people to come together to socialise," he says.
Announced in October of this year, UNA is a mid-market residential building that will incorporate digital and commercial features to deliver a fully interactive space that addresses the business and leisure requirements of both residents and visitors.
The project will have two ground-level lobbies as part of a G+11-storey building, with 478 residential units comprised of studios and one-bedroom apartments.
In addition, UNA will feature a licensed co-working space within a 2,000m2, digitised, all-purpose lobby lounge that includes work stations, a music room, a communal smart TV, a reading space, and creative zones.
Above all, the concept is essentially targeted at the millennial generation and their lifestyle, offering "the means for customers to engage in the space in which they live". Other amenities include Wi-Fi, meeting rooms, entertainment and recreation areas, a business centre, a swimming pool, a gymnasium, retail stores, restaurants, cafAaAaAeA@s, a supermarke and laundry and dry-cleaning services.
"I've been to [a development similar to this one] in Manchester, which is very popular. We visited a few [similar projects] before we launched ours, just to make sure we were on the right track, and our [concept] is as good as anything I've seen [abroad]," Durie adds.
As property market conditions continue to soften, and with competition in the sector having grown the past year, Nshama decided to employ a new approach: "We thought we'd bring something new to the market. In March 2015, the [sector] was very quiet, so we introduced our compact town homes, which were affordable - targeting people earning $4,000 to $8,000 (AED15,000 to AED30,000) a month.
"This will allow people to actually transfer from renting to owning [a property], and UNA is just an extension of that," he says.
Construction on UNA will begin in January 2018 and is scheduled to be completed by the fourth quarter of 2020.
"The design will take six months to complete. By then we'll have the building permits and we'll be on track to finish by Q4 2020," he adds.
The developer has not yet appointed a main contractor for UNA, but Nshama has finalised the pricing and is expected to tender for the project soon. "The design has to be done, but we will start with enabling works soon," Durie explains.
UNA has met with a positive response since it launched last month, according to the CEO: "It's doing well [...] and has sold well in a tight market, so we are happy."
Located in Nshama's flagship Town Square project in Dubai's Barsha area, UNA is just one of many residential projects within the development offering mid-market homes for single people and small families looking to own their first home.
Durie gives Construction Week an update on Town Square, which currently has several neighbourhoods in differing phases of completion. The completion date for the overall development has not yet been disclosed.
"We are about to award the final infrastructure package for major roads and services, which is between two companies at the moment, but will be awarded [soon]," he says.
Durie adds that work on the development's retail and entertainment components, including a Vida Hotel, will begin in the next couple of years. Town Square will also have a Reel Cinema as part of its entertainment offering, which Durie says will be launched in the next two to three years.
Nshama handed over the first 320 units of Zahra the townhouses in September, and has completed all infrastructure works and landscaping for that project.
"It's been a challenge, but we have had good contractors. The finished project is really good, and the first 26 families have already moved in, so it's starting to feel like a community," he says.
For past infrastructure works, Nshama worked with contractors including Al Naboodah Contracting Group and Kier.
"We are very cost-cautious because we want to sell at an affordable price. We negotiate with all our contractors as a result," Durie explains.
Durie also reveals updates about the progress of works and contract awards related to the other projects that are under development within Town Square.
Nshama has recently awarded two contracts for its Rawda Residence, and Engineering Contracting Company (ECC) has been appointed the main contractor for the project. Construction is set to begin in December 2017. The excavation, shoring, and piling works contract was awarded to Dutch Foundation and Concrete Processing Company, and work is already in progress, Durie says.
"[Construction] should start next month. The enabling works, shoring, and excavation has already started," he says.
A challenging market remains the top issue in the building of Town Square, although according to Durie, Nshama is "in good shape" when it comes to selling the actual product, with more than 90% of its units sold so far.
Speaking about the challenges faced during the project, Durie says: "Construction is fairly easy; the biggest challenge for a developer is sales. If you get the sales, you can build.
"We've launched more than 6,000 units, and have sold more than 90% of them, so we are in good shape," he adds.
The number of new developments and different payment plans on offer across the city pose sales challenges, however, creating tough conditions. Durie admits there has been a downturn in the market, which he attributes to various factors, including an oversupply in the luxury market.
"There is definitely a shortage of affordable homes. In the affordable segment, I believe there is demand," he explains. "There is a lot of choice, there are lots of developers, and you have to choose carefully."
He continues: "There are lots of payment plans where you pay way beyond the handover date, which is a risk for both developers and purchasers. When we sell, we sell a building and we handover on time, and I think people appreciate that. That's why I think our sales have been good.
"There is a lot of competition in the market and, because there is a choice, people are holding back to see if there is something better. People are holding on to their money."
According to Durie, 'affordable' means that the rent or mortgage payments on a property will account for no more than 30% of a customer's monthly salary.
"We launched this [affordable concept] in 2015 and lots of developers have followed since. We were the first ones to actually deliver, however.
"We are handing over 10 units daily and people are happy with the quality," he concludes.
[c] 2017 ITP Business Publishing Ltd. All Rights Reserved. Provided by SyndiGate Media Inc. ( Syndigate.info ).
|Printer friendly Cite/link Email Feedback|
|Date:||Nov 18, 2017|
|Previous Article:||Alternative dispute resolution mechanisms could benefit construction firms.|
|Next Article:||Digital tools can reduce construction costs and boost productivity.|