RESPONDING TO MARKET CHANGE

Dubai 2020 | REAL ESTATE & CONSTRUCTION | VIP INTERVIEW

TBY talks to PNC Menon, Founder & Chairman of Sobha Realty, on construction growth, market volatility, and disruption.

How will real estate and construction capitalize on the 3.8% growth that the Department of Economic Development forecasted for next year?

Post-recession, there have been strong years and not-so-strong years, and this fluctuation has persisted. In a good year, the primary residential real estate market can approach USD60 billion, while in a low year it is around USD30 billion. Within that market, there are a certain number of players. As we work to remain stable, one of our biggest advantages is that we are fully backward integrated. This allows us to have 100% control over every activity that goes on in terms of time and quality. With that, the product we are able to produce is excellent. Sobha has a share within this market. Sobha will be able to continue the business for many years, because Dubai can provide it. A company has to be a successful and honest player, and it must be capable.

Is Dubai's real estate market shifting to a new profile of investors or buyers?

This is a dynamic situation, and every year will be different. Now, we see population growth of around 5%. There are currently 500,000 homes here, and every year, we must add 25,000 units if we are to accommodate a 5% annual increase, which is close to USD30 billion. When there was 7% growth in 2018, we saw a market size of around USD40 billion.

How does Sobha react to volatility in the market?

The real estate business around the world is cyclical; however, there is always a minimum requirement. Dubai can accommodate a population of 10-12 million people. Singapore is only 700sqkm and, like Dubai, has no natural resources. Here in Dubai, we have 4,000sqkm. The ability of Dubai to absorb more people is huge. Over a period of time, Dubai will increasingly grow more. In 22 years, assuming a minimum 3.75% growth rate, Dubai will hit 10 million people. I see growth in the future, and in the real estate business, if one sees growth in the next five years, they should be pleased. I will bet on this country for at least the next 30 years.

What does Hartland bring to your product portfolio and to Dubai?

We are in the heart of the city, and this is one of the few communities that has such a strong location. There are few other projects and communities located in the heart of the city. As a developer, we bring years of experience doing huge and luxurious projects. We are real estate developers that know the business inside and out. We have a responsibility to our consumers to create the best projects we can. We make sure every aspect that goes into the creation of the product is the best it can be. Being backward integrated is unique not only to Dubai but to the entire world. We are the only one here that can boast such integration. The details of our projects are extremely important; we are focused on precision and perfection, and our clients know and appreciate this. At every product level, we have a dedication to quality that translates into persistent luxury. There is great luxury in our dedication to details and in our commitment to quality, and this persists throughout every level of our product offering. We have our own engineering and architectural studio, and this allows us to craft every detail with elegance and precision.

What can you tell us about Sobha's focus on innovation?

We have a quality department that focuses on bringing the best techniques and practices to our operations. We never rest on our laurels and never will. With every new building and project, we strive to optimize and improve our practices. We are always raising the bar for ourselves, and this is a truly exciting component of being in this industry.

What is the purpose behind your new offices in London?

It helps us maximize our international branding as well as strengthen our bonds with our customers. Many Chinese travelers frequent London, and they represent one of the largest blocks of buyers for us. The Chinese economy is strong, and this translates into Chinese consumers with a keen interest in international real estate. Dubai is also a welcoming environment, allowing many different people to enjoy themselves and integrate. There is a strong international thread that connects people together.

How do transformation and disruption inform your business?

Transformation and disruption are all about creating a product for our customers that never compromises on quality. We must always remain at the cutting edge so that we can deliver the very best the market has to offer. And when our customers do not realize the quality of the product we provide, we must educate them. We know what quality and luxury is, and we must educate the market on these issues so they can be informed and so we can drive the market forward. We are in this industry to educate people about how we are changing real estate and offering the finest products.