In February 2021, Select Group, the Dubai-based private real estate developer, announced its first foray into the Business Bay and Downtown Dubai district with its acquisition of 15 Northside. Acquired with shell and core in place, and completed to about 50%, the project marked a divergence in the developer’s strategy, which had previously been concentrated on building towers in Dubai Marina.
Having been active in the Marina area for more than 15 years, making the decision to expand into another high-profile area of Dubai is an important step for the company. Having established its name and reputation with projects such as Marina Gate, it is now time for Select Group to expand its reach, says Rahail Aslam, CEO, to Big Project ME.
While 15 Northside may have been its first acquisition in Business Bay, it is by no means the last, he asserts, highlighting a recent acquisition land by Select Group as being key to the next phase of the company’s evolution.
“In terms of moving from Marina to Business Bay, it was something of a forced move. We’ve developed in Dubai Marina for 15 years, with several thousand homes and many waterfronts developments there. It’s fully developed now and there’s very little or next to no development left to be done there. So, as a core developer that is well established, with a good track record in this marketplace, we had to identify where we could develop next, and where there would be continuity for us.
“Business Bay is centrally located, it’s in the central business district, and it fits the bill. In fact, we found a once-in-a-lifetime opportunity by securing the plot that we’re involved in now – it’s a spectacular plot with almost complete water coverage. It’s unusual to be involved in influencing the masterplan, but we were fortunate enough be fully involved, working with best-in-class master planners to break down a one million square foot land parcel into several parcels.
“It’s a complete vertical development, but what we’ve done is manage the amount of horizontal space we have for amenities, green spaces, parks, running tracks and so on. That type of masterplan doesn’t exist in Business Bay, or in the Downtown Dubai area,” he points out.
Aslam explains that Select Group see the acquisition of the Peninsula plot as being the natural successor to the Marina Gate development. With the plot being 50% bigger in size and a GFA of 3.3 million square feet in its entirety, the project is certainly the largest scale development it has undertaken.
“It is eight large scale developments within a masterplan. We’re kicking it off with Phase One, which is a 30-35 storey tower, and we’ll also be building our head office there. We’re moving from Dubai Marina into the development itself, and we’re building a substantial 100,000 sqft headquarters for the group. That’s Phase One and it will kick off any day now. We’ve done the award and the contractor is mobilising. It’s probably going to be a 30-month build, and by early next year we’ll kick off Phase Two. There is a plan in place, which will see an additional phase kicked off every six to nine months,” he says.
The overall completion schedule for the massive project will be six to seven years, Aslam adds, though he caveats that by pointing out that some market normalisation has to exist for that timeline to be fulfilled. If the pandemic or another related global event like it continue to impact the world economy, then plans will need to be delayed, he warns.
However, the market indications for the project seem strong, with Select Group’s sales and commercial teams receiving positive feedback from investors, he says, adding that the developer is looking forward to a market launch in the third quarter of this year.
“Peninsula isn’t a deviation from our core business, it’s a vertical development that we’re very familiar with and the master planning process was a joy to be a part of. We’ve created land parcels without compromising on open space and we’ve influenced what we think is a world-class development. We’re looking forward to kicking off construction later in the year,” Aslam elaborates, adding that the horizontal landscape of the project, with its emphasis on outdoor spaces and leisure amenities makes it quite pandemic-proof, in his opinion.
Looking at the broader picture for Dubai in the wake of the pandemic, Aslam states that with the market being cyclical, he expects the remainder of 2021 and beyond to see an upswing thanks to a variety of positive forces coming to the fore.
“Markets are cyclical – there are long cycles where you have peaks and troughs. We’ve had the pandemic effect primarily in 2020, where globally, most countries were locked down. There was a lot of frustration, a lot of pent-up demand, that built up as a result. People’s behaviour has changed, outlooks have changed.
“We believe that Dubai has done incredible crisis management, the leadership (during the pandemic) was probably amongst the best in the world. They’ve kicked off incentives to drive business and population back to the UAE – the golden visas, the passports, the 100% company ownership. We’ve got all time low-interest rates, while the Expo is also kicking off soon.
“If you throw all these elements into a pot, it will kick off the market. Add in the frustration and lack of activity globally on the investment front, and I think we’re poised for a relatively buoyant period going forwards. I’m optimistic, but always cautious,” he asserts.
Aslam points out that Dubai was in a recovery period pre-pandemic and that he believes that transactions are now happening at pre-2008 demand levels.
“All we’re seeing now is a continuation of the recovery, post the pandemic, with some pent-up demand. I think that’s going to continue,” he predicts confidently.
“Dubai offers good value for money, compared to other cities. I’m not going to compare it to London, Paris or Hong Kong, but when compared to other leading cities, Dubai offers good value for money thanks to things like safety, the lifestyle, the infrastructure and so on. I think it’s more interesting than it ever has been, to be honest.”
As a result, Select Group has positioned itself to take advantage of this upsurge in demand through a series of marketing and broker campaigns that drove interest in its inventory of Marina projects.
“We still had inventory in Marina Gate, No 9, Studio One, as well as our Business Bay project, 15 Northside. As soon as the market showed signs of picking up, we kicked off all activities and really engaged (with our clients) to start monetising our inventory base, which we now done almost completely.
“In parallel, we’ve been accelerating plans to develop Peninsula, so we’ve awarded the early and enabling works contracts, while planning to kick of sales later this year. It’s going to be our conventional model, where we start construction, have a show unit on site, and then kick-off a launch campaign for Phase One of the project. Our plans haven’t dramatically changed as we always wanted to bring Peninsula to the marketplace, and in the third quarter of this year, we’re going to do that. It probably would have been a bit earlier if the pandemic hadn’t happened, but we’re still broadly on track, in terms of our plans to progress the development.”
Work on 15 Northside is now at the 60% completion mark, Aslam says, with working progressing according to schedule. The project has nearly been sold out, and completion is expected by the third quarter of 2022, with best-in-class service providers planned to be in place prior to the handover to investors. This attention to detail is reflected in the group’s wider strategy and future plans, which continues to progress in the same direction it has been for the last 20 to 25 years. The intention for any project started is that it must stand finished, fully capitalised, Aslam insists.
“We’re not only developing in Dubai. We have a number of investments deployed in the UK – in London, Liverpool, Sheffield and Nottingham. We have diversified considerably to make sure that we don’t have a concentration risk, and that diversification will continue. We’ve also recently started to invest in alternative businesses, different sectors, that show growth potential, which is more about the diversification of the Group,” he reveals, highlighting the health and fitness sector as one area of particular interest.
“For property, I would say that we’ve got our hands full with Dubai. We’ve got a substantial pipeline of development coming through, and I think it would be irresponsible of us, at this moment in time, to go and do more,” he states in conclusion.