Ebrahim Al-Sulaiti, CEO, UDC
30 Sep 04:30 AMSector : Real Estate Country : Qatar
Behind the Shine
What were the main developments for The Pearl in 2012 and these first months of 2013?
In 2012, The Pearl-Qatar attracted new retailers who have opened outlets catering to middle income customers and families. We also sold a good numbter of plots throughout the Island as well as properties in Qanat Quartier, which was completed in 2012. In 2013, we will see the launch of Medina Centrale as well as the launch and opening of new retail and dining outlets.
In line with UDC’s strategy, our efforts today focus on finalizing the construction of the Island. The Pearl-Qatar is a phased mixed-use development comprising 10 precincts. It includes beachfront villas, elegant townhouses, luxury apartments, exclusive penthouses, fivestar hotels, marinas, and retail outlets and restaurants. Our priority is to deliver these facilities on time.
What was the reason behind slashing the community rates at The Pearl, and what has been the feedback?
Reduction of master community service charges at The Pearl-Qatar is part of our ongoing assessment process. Service charges are re-evaluated every six months by Madinainova, Master Community Managing Agent at The Pearl-Qatar. Part of Madinainova’s role is to deliver the best services at the best possible rate.
The rationale behind the reduction is that the service rate will go down as more residents move in to reside on the Island. The increase of occupancy at The Pearl-Qatar has attracted more suppliers who are now able to provide the same standard and quality of services at lower costs. The rate reductions in 2012 have brought the total cuts in Master Community Service Charges affecting The Pearl-Qatar’s common use facilities areas to 45.5%, underscoring UDC’s dedication to service excellence and to provide residents with quality services at fair and favorable rates.
How do you see the new and more attractive mortgage schemes boosting sales at The Pearl? What is missing in this segment?
We have witnessed in 2012 renewed interest from the major financial institutions to finance property sales at The Pearl-Qatar. Major banks, notably Qatar National Bank (QNB), has introduced new and attractive mortgage offers specifically designed for our project. Other institutions have also joined in this effort, including Commercial Bank of Qatar (CBQ), Doha Bank and others. These favorable mortgage offers, some of which are offering most competitive interest rates of 3.99% and mortgage repayment periods of up to 20 years, have led to a substantial increase in sales and leasing transactions in 2012. And we expect this trend to climb further up in 2013.
There has also been increased demand in rentals of residential properties in The Pearl-Qatar in 2012. As a result, one, two and four-bedroom apartments were the most sought after. Rental values of apartments on The Pearl-Qatar have increased marginally, but once the planned shopping facilities open and the national infrastructure projects start boosting population growth, areas such as The Pearl-Qatar could witness an even greater increase in demand, and consequently in rental rates.
How are you dealing with the increase of prices of construction materials and bottleneck problems without passing the costs to the consumer?
Any major rise in construction materirealals will always create a challenge because passing the cost to the customer is not easy, especially that the construction section is yet to recover fully from the effects of the global financial crisis that has hit this sector hard in recent years. Rising costs for construction materials could rain on the industry’s parade if not managed properly. In robust and healthy real estate markets, developers would simply raise prices to manage increasing costs. However, this strategy may need to be employed judiciously until the market fully recovers from the recent global financial crisis.
As a developer, UDC seeks to limit the effects of price changes by signing fixed price contracts. As a given scheme is tendered, contractors submit a firm price bid. This strategy mitigates rising costs and protects the company from potential delays and losses.
What are the main characteristics and highlights of Medina Centrale, and when do you expect the first tenants and retailers?
Medina Centrale is considered to be the “Main Commercial District” or, the “Town Centre” of The Pearl-Qatar. This district has been developed as a single, mixed-use property development comprising residential apartments, ample retail and dining space, entertainment facilities and thousands of car parking spaces. Its traditional design cleverly combines the nostalgic old-look style with modern convenience.
A giant cinema complex is expected to open at the Pearl-Qatar’s Medina Centrale this year. Consisting of 1900 seats, this cinema will only feature the latest blockbusters.
As well as supporting the broader community at The Pearl-Qatar, Medina Centrale will serve as a prime residential area in its own right. One and two bedroom units are located above the retail zones in medium height blocks with views over the town square and beyond. Convenient parking will be provided close to all amenities.
Can you shed some light on The Pearl-Qatar’s green credentials with its different programs for marine life preservation, recycling, district cooling…?
The Pearl-Qatar’s Environmental Affairs Department plays a key role in promoting environmental awareness and green programs throughout the Island. The department handles over 20 different projects including twice yearly Marine Ecological surveys which test and report on the seawater quality, the seabed and the marine life around the Island, fortnightly sea water testing, noise monitoring, dust monitoring and contractor and sub-contractor monitoring. There are also 14 approved environmental policies and procedures including recycling, a ban on fishing, green cleaning and a ban on the use of non-degradable plastic bags.
A new emergency services station will be located at The Pearl; “The new station will reduce response time to areas at The Pearl to less than three minutes, meeting the highest international standards of time.” With safety measures becoming increasingly important, how paramount is this for the project and when will it be operational?
The new fire station at The Pearl-Qatar will be completed in January 2014 and will service the Island and its current residential and commercial occupancies, presently served by a station temporarily set to serve the Island’s emergency needs. The station’s service area will cover all precincts of The Pearl-Qatar.
Construction on the 2000 square meter fire station started in December 2012 and will be completed in January 2014, with a projected cost of approximately QR 25 million ($6.9 million). Among its many state of the art facilities, the station will also feature three apparatus bays, five fire engines, four ambulances and a central command room.
This is an extremely important development for the community at The Pearl- Qatar, as it will provide comprehensive, efficient and fast emergency response to all precincts. As a result, emergency response time will be significantly reduced, leading to bolstered security and safety throughout the Island.
UDC has posted 32% rise in profits in 2012. To what factors do you attribute these superb results?
The Company’s focus in 2012 has been twofold: to attract investors to purchase plots of land available for investment at The Pearl-Qatar and to encourage more retailers to make the Island their primary location.
The overwhelming sales and retail leasing response in 2012 underlines the degree to which The Pearl-Qatar has captured investors’ imaginations. Moreover, the Island’s unique positioning makes it an ideal place for local and global retailers looking for the perfect location for their shops. We expect this solid financial performance to continue in 2013 in light of plans to launch new precincts, attract new hospitality and retail outlets and sell more plots of land throughout the Island.
What major developments are expected in the next two years?
Currently we’re focusing on completing the construction and the subsequent launch of new precincts at The Pearl-Qatar in a timely manner. However, UDC is always on the lookout for new opportunities that will benefit the company and its shareholders and partners.
You have extensive experience on large projects through the previous positions you have held. How do you feel that this have prepared you for such a challenging job?
A strategy is only as good as its execution. We have set challenging goals for coming years and we plan to make them real. These goals call for increasing revenue from real estate sales and retail leasing at The Pearl-Qatar, as well as from improving productivity at our many subsidiaries and partnerships. We will also seek to enhance gross profit margins, reduce expenses and improve customer satisfaction.
These are challenging goals, but we are intensely focused on implementing them. During my previous positions, I’ve seen that when we focus, we win. Therefore, I’m excited about what’s ahead as I see clear signs of long-term opportunities, and we plan to grasp such opportunities through hard work, focus, dedication and performance.
Last, The Pearl-Qatar is arguably Qatar’s most high profile project. What does its success mean for the country? What is the project’s contribution to Qatar on the World stage?
The Pearl–Qatar was conceived as a natural progression in a succession of extraordinary tourism initiatives in Doha. The essence of the Island is its design. It captures the look and feel of communities in Italy and other historical places, especially France, Spain, Morocco, and Portugal.
The greatest contribution The Pearl-Qatar makes to Qatar on the world stage is in the variety of international themes featuring its various precincts. This man-made island is designed to highlight the wealth and prosperity of Qatar, and to reinvigorate the lifestyle offerings of the entire nation. As such, The Pearl-Qatar is a major contributor to the country’s ambitions to become a destination of choice on the world’s refined tourism map.
The Island, which offers the best freehold investment opportunities in the Arabian Gulf, combines the atmosphere of the Riviera with a fascinating mix of Spanish, French, Italian, and Arabic architectural designs. This combination gives The Peal-Qatar its unique blend of luxury, history and lifestyle, and makes it one of the most attractive destinations in the region.