Property Weekly, October 2007  

‘WE BELIEVE IN THE FUTURE OF DUBAI’

Property Weekly speaks to Dr. Shariar Daneshjoo, Chairman of Bavaria Gulf

Bavaria Gulf is cementing its cam­paign on the catch-all phrase: ‘Built to German standards’. Judg­ing by the response the developer has had for its first project in Dubai, the campaign has struck a chord with investors.

So what has prompted Bavaria Gulf to shift focus from its home market to Dubai? And will it be able to deliver on the promis­es in a market where setting standards has often proved difficult to follow through?

In a free-wheeling chat with Property Weekly, Dr Shahriar Daneshjoo, Chairman. sets the record straight. And expounds a lot more besides.

Why did you choose Dubai over any another location in the Gulf?

We came to Dubai because of its liberal market, offering opportunities to in­vestors. In other emirates and the GCC, you still have restrictions.

We believe in the future of Dubai, bas­ing ourselves on the past achievements of its strategic plans set out in 1975 and 1985. They worked — so we trust in Dubai's future.

I believe that 2015 will see Dubai becoming a key player and the must impor­tant financial hub in the Middle Last.

Bahrain used to hold that title, how will Dubai get there?

Dubai is investing a hit in infrastructure, freehold and free zones which are unique in the region. It has managed to increase its GDP over the years more than it had forrecasted. It will achieve its goal to reach $44,000 GDP per capita by 2010. And with increasing the GDP per capita, the power of the investor will increase and Dubai's potential as well.

Will you be expanding into other emirates? Step one is our investment plans in Dubai only. Put in the future we might look at the other emirates. We are investigating.

Will there be other projects besides Sandoval In Dubai?

There will be others, sub-brands of the Sandoval family, currently comprising townhouses with apartments to follow.

When do you envisage breaking ground? This is the first project where Limitless has committed firmly to dates and some developers have already started building. We have the feeling that Limitless has learnt from the past because there were projects with delays from 6 to 15 months at times in Dubai generally.

At the moment, Jumeirah Village is pro­ceeding very well and we will start con­struction beginning of next year.

Are you concerned about late delivery?

It is very important to be reliable be-cause we will pay penalty if we delay. It is our problem. why should the client suffer:: We actually want to deliver be­fore time.

Although we are communicating de­livery for end 2009 we're mobilizing lots of resources to handover earlier in the summer of 2009. This would give out company the chance to gain reputation in this market. We want to do everything possible to keep our promise within the local constraints.

Which architect did you choose?

Diar Consult, they have a great reference in this market, among them Nakheel's sales centre, Al Salam City, Victory Heights and Jumeirah Islands.

How are you going to apply the German quality certificate TÜV?

We love challenges. We learn every day to look for challenges and solve them - that's why we're here. TÜV Middle East has ac­tivities in the region and an office in Dubai responsible for quality inspections of elevators, for example.

So they are not new to the region, but ours is their first project to assure quality insurance in construction in the Middle East. We're confident we'll get the certificate.

How will quality translate Into your sales prices?

We are tracking the average market prices. We are a mid-range priced devel­opment with high-quality for which you will pay 8 per cent on top.

We promised to be mid-range with our price. So we are looking at townhouses starting from Dh1.88 million as a promo­tional price during Ramadan

Who do you hope to attract?

Our philosophy is to satisfy investors and end-users that are not only looking at the price, we want to provide the quality everyone talks about.

We'll use providers who are specialists in their field right down to the doors. The market will change and everyone will no­tice that we're pioneers. We can't control the whole Dubai property market but hope to have a fair diversity between in­vestors and end-users.

We do have the skills to manage invest­ments. We are highly technology driven using all kinds of specialized software for different areas.

Investors have been used to buy cheap and flip. Are you sure they're prepared to pay the premium?

To be frank with you three years ago when the speculators ruled we would have failed. We would have entered this market with the wrong product and would have been bankrupt or whatever. the philoso­phy of our mother company IB Wohnbau is to focus on end-users and their needs and wants. We have delivered thousands of townhouses in Germany, which give us the expertise and history to talk about. Were sure were entering the Dubai mar­ket at the right time with the right product.

Do you think your quest for quality will have a ripple effect on Dubai?

I would welcome it. You can't copy TÜV compliance that easily, but if others are able to do so it would be enriching the market, increasing buyer's trust.

Doesn't investing in quality cut your profit margins?

We invest into the future of the company by increasing quality and with that brand in Dubai. Each brand has a certain asset we believe is directly linked to the in­vestment in your brand. Our profit lies in that rather than looking at short-term margins. Even marketing doesn't help anymore without the right quality product in mature markets. This is also the future of Dubai.

How will you marry landscaping with maintenance costs?

We always pay attention to the balance between green and maintenance costs. Yon can't create unlimited amounts of green. Ownership costs have to be bal­anced and reasonable. We will manage ourselves and provide a solution to the landlords. We do have a concept, which is fair, and works,

So there won't be one flat maintenance fee for all then?

Part of our philosophy is to be transpar­ent. All invoices are visible to the tenant and owners.

We take the time to invest in installing different metres for different areas, whether its elevators not used by every­one, the pool, etc. The townhouse owner may use the pool but not the elevator in the apartment building for example.

How did you get into Nakheel’s top 10 developers list?

Jumeirah Village is more than a development but a city. Nakheel's project management office named us because of process­es, materials, the TÜV and our experience — they liked our approach to the project and the design.

The market is a little fed up with the Mediterranean, Spanish design. etc. Contemporary is what is now requested in Dubai especially in Jumeirah Village as they want to have huge diversity to create a city.