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Dubai-based Samana Developers will foray into the luxury hospitality segment by launching two 5-star hotels in the emirate this year, CEO Imran Farooq told Zawya Projects.
The developer maintains a bullish outlook on Dubai’s real estate market as it announced plans to launch 12 new projects worth 2.5 billion UAE dirhams ($680 million) in 2023.
“The locations for projects have been identified and plots secured,” Farooq said, adding that 20 percent of the new projects are planned to in the hospitality segment while 80 percent will target the residential market.
“We are in the process of getting the approvals for design drawings, with all projects between 60 percent and 80 percent approved. We are expecting to secure the full approvals in a few weeks.”
Farooq said the company intends to hire contractors as soon as they launch a project.
“The contractor and sub-contractor appointments are typically timed with project launches,” he added.
New entity for hospitality
The developer’s hotel properties would be under a new entity, Samana Holidays. The first two 5-star hotels will be developed in high-demand locations, the CEO said, adding they will have a total of between 400 and 500 keys.
He said talks with multinational hotel operators in advanced stage, adding that he expects to secure the agreements before the end of the first quarter 2023.
Earlier this month, Dubai’s Department of Economy and Tourism said that average occupancy for the hotel sector stood at 73 percent in 2022, one of the highest in the world, up from 67 percent in 2021.
The emirate’s hotel inventory stood at 146,496 rooms in 804 hotels by the end of December 2022, compared to 126,120 rooms in 741 hotels by the end of December 2019.
On the other hand, Samana Holidays has converted 500 units in its existing completed residential projects in Dubai into serviced apartments.
“We expect to generate AED38 million from these holiday-home units. Our homeowners will get 15 percent returns, instead of traditional 8-10 percent in Dubai real estate residential investments,” he noted.
Luxury focus
On the residential front, Samana Developers is currently focused on the mid-luxury segment but will eventually move towards super-luxury by the first half of 2023. No details were shared on the super-luxury projects.
“Traditionally, the demand for Dubai real estate comes from around the world. We expect our top five buyers to come from Europe, Eastern Europe, CIS, Russia, and GCC, in addition to China and India, in 2023.
“This aligns with the UAE’s efforts to attract visitors from inflation-hit Europe and the UK. Dubai is attracting these regions with sunny sands, the lower cost of living, and tax benefits.”
Farooq said the 12 new projects would be self-financed.
“All of our projects are self-funded with zero borrowings from banks. This is because we are a post-handover developer as delivered projects inflow greatly supports funding and launching of projects.”
Investment plans
Despite the COVID-19 pandemic-related construction challenges and site workforce restrictions imposed by the authorities in early 2022, Samana Developers managed the construction flow by delivering AED 110 million Samana Hills project. According to the developer, other projects - Samana Waves, Samana Miami, and Samana Santorini - have sold out.
In addition, the company has fast-tracked the construction of AED130 million Samana Park Views, along with Samana Waves and Samana Golf Avenue projects.
Despite its growing property portfolio, Farooq ruled out plans for backward integration by acquiring a contracting firm.
“But we intend to expand our quality control and engineering teams to hold strong supervision on contractors and consultants,” he said.
Samana Developers will further increase its quality control and engineering teams from five to 15 this year.
“With all this, we see 2023 will be another bullish year for us since our development plans and expansion are always backed by UAE’s investor-friendly regulations and attractive visa regime, especially the Golden Visa for 10-year straight residency for real estate buyers and their families,” he stated.
(Reporting by D Madhura; Editing by Anoop Menon)
