Beating a path towards Qatari property market

Sabban Property Investments is a relative newcomer to Dubai’s burgeoning real estate sector. The family-owned Saudi Arabian-based company established an office in Dubai last year, but the company has yet to enter the local residential development scene in a big way — preferring instead to concentrate on the emerging property market of Qatar, where it is developing three towers on the landmark US $2.5 billion Pearl-Qatar project. Managing director John Browne MBE tells CW why he sees such massive potential in the country.

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By  Sean Cronin Published  September 3, 2005

Beating a path towards Qatari property market|~|DSCF1827-200.jpg|~|Sabban’s project on the Pearl-Qatar is unique since all of its three towers will be built on one podium to create a community within a community. |~|Why did Sabban decide to expand out of its domestic market of Saudi Arabia last year and invest in Dubai?

Having concentrated on the domestic market in Saudi Arabia for a long time, the owner of the company took the decision to explore whether we could expand abroad and Dubai was the natural place to come.
But having arrived here it was plain to see the residential market was saturated. They are building tower after tower here and launching them every week, so if you decide to jump onto that particular bandwagon, you have to predict where it will be in two or three years’ time.

As a relative newcomer, how do you see the market in Dubai?

We are still very new to the market and you have to ask where do I jump in — do I spend AED600 million on building towers on a piece of land on Sheikh Zayed Road, and hope in three years’ time that the land will still be valuable?
Will Business Bay take the business away from Sheikh Zayed Road? Will traffic be so bad that no one will want to work there? Nobody really knows.

Is the market heading for a crash?

In the 12 months that I have been here, some of the asking prices have doubled.
But all of these properties are only worth what the end user is prepared to pay. The problem is that speculators come in and buy up property and push prices beyond what the end user can pay, and that is when there has to be a correction.

Where do you see most growth potential within the GCC property development market?

The beauty of Qatar as an emerging market is that they have the benefit of other people’s hindsight so they don’t really have any excuse for not getting it right. They can look at other projects elsewhere in the region that may be similar to the Pearl, for example, and put the infrastructure in first rather than last.
You can look at other projects and see the problems that they have had, and there is no reason why you can’t solve those problems at the beginning.
Qatar is a new market, new to freehold and everything seems right about it. They have great GDP, a fantastic growth rate and they have the will.
They want to bring Qatar to the forefront of the Gulf and they want to do it in a measured way and not lose their culture.

Where are you currently developing in the country?
Our big project is on the Pearl-Qatar where we are developing three towers on the first phase of what is the first freehold project in the country. We have three towers out of the 10 that have been released on the first phase of Porto Arabia.

How does the development approach differ on this project?
UDC has insisted on having one style of development throughout. If you go down to the Dubai Marina you will
see all sorts of different towers, like this or like that, but on the Pearl they all have the same Mediterranean style.
You have to build them to the client’s specification because it is part of the purchase agreement. They give you full specifications although you can put your own finishings inside.
Our project is unique in that all three towers will be built on one podium. The idea there is to create a community within
a community. There will be a lot of facilities available such
as coffee shops, recreation facilities, swimming pools and squash courts.
It means that people will be able to get to know their neighbours instead of being isolated within your own tower.
People with their own children will be able to walk them around the area.

Will Qatar ever really be able to compete with Dubai as a destination, and how does the retail offering differ?

I think Qatar will emerge as a tourist attraction as Dubai becomes saturated. I think people like to see a bit of culture as well as the nice restaurants and the upmarket shops. You don’t have the huge malls that you see in Dubai. I think this upmarket style of shopping will go well in Qatar.

What stage of development is the project currently at?

The compaction stage of the reclamation works has just been completed and is being handed over to the developers mid-August. Then we plan to launch our towers, but we won’t do that until we are ready to start construction. You see so many fairy tale project launches and the construction ends up starting two years later, so we want to avoid that.

Are you eyeing any other new markets in the Gulf?

We are developing some warehouses in Sharjah, and Oman is another possibility. We are also looking at
Abu Dhabi, which is also a potentially very interesting market for us, although we are not that keen to jump in at
the moment. ||**||

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