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Select Group eyes more UK and UAE real estate projects

Arabian Gulf Business Insight - August 4, 2022
Peninsula development in Downtown Dubai

As the first community-focused waterfront development in Business Bay, Peninsula presents a selection of six premium residential towers, waterfront podiums, and commercial units. With an active and social lifestyle at its core, Peninsula will feature a variety of lifestyle and sporting facilities, from tennis and Padel courts to running tracks and a skate park, along with family play areas.

Dubai developer Select Group has had a ‘record-breaking’ year of sales, on a par with the pre-2008 boom era that many may associate it with, as it pushes ahead with ambitious plans both in the UAE and the UK.

The firm, which was founded in 2004, is one of many riding the wave of the emirate’s strong real estate growth.

In the second quarter of 2022, Dubai Land Department recorded a total of 22,504 sales transactions worth AED59.15 billion ($16.11 billion).

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This was a 61.56 percent year-on-year increase in volume, and the highest for a decade.

“There’s plenty of data out there to suggest that this has probably been one of the strongest periods we’ve seen in the last year,” Rahail Aslam, founder and group CEO of Select Group, told AGBI.

His firm has delivered over 7,000 homes, with another 5,000 at various stages of development, giving a combined gross development value of over AED20 billion.

“It’s been record-breaking for us. It’s probably been our most successful period in a very long time, maybe comparable with pre-2008 when the market was booming.”

Aslam may well look back fondly on the glitzy latter period.

His business made a big splash in the emirate when it launched Aquitania, a $1.5 billion project spread across the France and Spain islands on The World, a project consisting of a series of man made islands in the shape of the globe.

The launch events attracted the likes of Hollywood star Hilary Swank, the UK’s Duchess of York and Destiny’s Child singer Kelly Rowland.

But the project was eventually put on hold in the wake of the global financial crisis.

“The crash happened. We cancelled the project. Whatever sales we had, we gave people money back and we still own the land.

“It’s a project that we will definitely develop in the future,” Aslam said, although it’s not currently on the group’s “active radar.”

Partnering with Jumeirah

At the end of July, Aslam’s firm partnered up with Jumeirah Group, the hotelier behind the iconic Burj al Arab, to develop branded residences at its flagship master community development, the Peninsula, in Business Bay.

Masterminded by Killa Design, the same team behind the Museum of The Future, this will be the fifth of six towers to be built at the Peninsula and is expected to be complete in the fourth quarter of 2025.

The latest tower is part of an ongoing partnership with Jumeirah, following the launch of the Jumeirah Living Marina Gate in Dubai Marina in 2020.

But it won’t be the last project, with the next one possibly further afield.

“We’ve got a long-standing relationship with them. Our Marina Gate development was branded with them, and has been a huge success,” Aslam said.

“We will certainly look to do more with Jumeirah in the future in other markets, London could be a prime example.”

British assets

Dubai is Select Group’s core market, but it has also been breaking into the UK market.

Last month, it acquired The Mere Golf Resort and Spa, a property based in Knutsford in the north-west of England.

Aslam, who originally hails from nearby Manchester, said the resort was acquired through an off-market process. There’s a lot of potential for his firm to add value to it, he said.

“The value at Mere is in upgrading the asset. It needs a full refurbishment. We’re going to add more rooms to increase the conference capacity to 1,000 people.

“We’ll rebrand, probably with an international hotel operator, and then it will become an income-producing asset for the group,” he said.

Aslam said his investment team looks at around 100 projects a year and only pursues one or two.

He is confident the UK is still a strong market for more potential assets. The pound dropping makes it more advantageous for dollar-backed companies like his, but he has a ‘wait-and-see’ approach.

“Over the next 12-18 months, there is going to be quite a bit of opportunity, but we’re a little bit slower in terms of what we’re going to acquire.

“We’re going to shore up our tax position, to wait and see what unfolds over the next six months. We’re not in a rush to deploy cash.”

Boosting the UAE land bank

Aslam is more proactive about the Dubai market, and he predicts that the record-breaking figures regularly put out by the emirate’s Land Department will continue.

“I see this trend continuing this year. Is it going to carry on next year? Probably.

“But for how long? I see it being a strong market. There’s a lot of incentives – Golden visas, 100 percent foreign ownership, a tax-free environment.

“If things do soften globally, I think Dubai will be very resilient, as well as the wider region, because we have strong oil prices that will prop it up.”

With demand rising, development land is also likely to rise. Aslam said he was fortunate that he built up the group’s land bank when prices were lower.

“We acquired land a number of years ago. The surge in demand has been good for the group because we already had land in our land bank, with designs ready to be launched,” he explained.

If the emirate’s real estate’s growth continues, it might be worth his company revisiting that development on The World sooner rather than later.