Townhouses in UAE for Dh650,000?

Ever imagined buying a two-bedroom townhouse in Dubai or Abu Dhabi for Dh650,000?

Well, affordable housing could be a reality in the UAE soon, as Tasweek, an Abu Dhabi-based developer, plans to unveil details of its affordable housing complex project by the year-end, to coincide with its plan to launch a Dh1-billion initial public offering (IPO).

“Around the world, affordable housing is apartments. We will be offering townhouses/villas in the range of Dh650,000 and hence, we are calling it affordable luxury,” Masood Al Awar, Chief Executive Officer, Tasweek, told Emirates 24|7.

Though the housing complex plan was announced last year, the project has not taken off yet as the developer is still working to finalise the location.

The project was previously planned in Dubai, but the developer is now considering Abu Dhabi as well.

“Details of the project will be revealed during the launch of our IPO,” Al Awar states. He added: “Prices will remain in the affordable range. We could see a 10 per cent increase in the price, but only as a result of inflation.”

Has the delay affected the company’s image?

The Tasweek CEO says, “We already have 400 people ready to pour in money if we decide to start the project today. These people, if they didn’t have the confidence, wouldn’t have come to register for our project that we planned to launch a year ago.

“We have survived the tough times and that gives people the confidence that we can do the correct business when the time is right.”

Price - the deciding factor

According to Al Awar, the principles of real estate investment have changed in the UAE.

“It is no longer ‘location, location, location’, but ‘price, price, and location’,” he asserts.

“We do a lot of market analysis and have noticed that price is the number one factor for both, investors and end users.

“The second priority for an investor is to get a quick return on his money, while end-users look for quality. You will see our project will be a very unique one and we are not going back on what we want to start.”

In September 2012, JLL, a global property consultancy, said the Middle East and North Africa did require 3.5 million “affordable” houses.

However, real estate experts opine that government support is essential since the sector has low margins and requires incentives to be given to the private sector to ensure an optimal level of profitability.

The UK-based Knight Frank has predicted prices in Dubai will rise by 10 to 15 per cent in 2014 after having increased by over 20 per cent in 2013.

In Abu Dhabi, prices are set to rise due to increasing demand from investors and end-users.

IPO listing decision next month

Talking about the planned IPO, Al Awar says the company will use majority of the IPO proceeds to strengthen its position in the UAE and expand geographically as well.

Currently, Tasweek has projects in Morocco and Malaysia.

“We are planning to go to three more countries, Indonesia, Singapore and Thailand.

“We have already lined up our asset class and we want to make sure that the asset class we join has some unique feature and because of our business model we make sure that our capital is very well protected.”

Tasweek has finalised the lead manager for the IPO and is now scouting for a co-lead.

“We are considering a couple of companies that are located in the Dubai International Financial Centre as a co-lead manager for the IPO,” he reveals, refusing to disclose the name of the lead manager.

As to the listing on the UAE stock exchange, Al Away says the decision will be announced next month.

“We have had discussions with Abu Dhabi Securities Exchange (ADX), Dubai Financial Market (DFM) and Nasdaq Dubai.

“We have international properties so Nasdaq Dubai could be one of the contenders, but trading wise it is the DFM, and since we are an Abu-Dhabi company, we are considering the ADX. The decision will be announced next month,” he reveals.

The company has a share capital of Dh300 million and is owned primarily by 53 Emiratis.

[Homepage Image via Shutterstock]
 

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