Following “a year of stability” in the regional real estate market, Shakhani Group managing director Ahmed Shaikhani and Memon Investments’ Arif Majeed talk to Dan McAlister about the sector’s future in 2012
When Shakhaini Group was established 30 years ago, the landscape – both physically and in terms of development – was a very different place.
Today the group has 11 divisions spanning everything from construction to investments and even call centres (see below).
Despite the diversification within the group the anchor business interest is property; investment, development and community projects.
Although 30,000 property development units have been delivered to date, it’s a sector that has been hit hard. Still struggling to recover from 2008, prices in Dubai and Abu Dhabi continue to fall, despite the plethora of reports and analyses speculating that prices have “bottomed out”.
The latest of these, by Jones Lang LeSalle, claims prices will only bottom out in 2012, with recovery unable to begin before 2013. An IMF report dated March 2010 indicated that real estate prices in Kuwait, Qatar and the UAE had plummeted by 60%, 40%, and 50%, respectively, from the highs of 2008. Further afield, the same problems remain. Real estate values in Lebanon dropped 12% last year, with the total value of transactions falling by $640m.
Yet in defying the fate of almost every competitor, it wasn’t until financial crisis hit that Shakhani’s contracting arm really established its credentials.
“During the crisis the most important thing in our company policy was not to take any financial loans,” says managing director of Memon Investments Ahmed Shaikhani.
“Now we have passed this crucial point we are on the regular track, but the most important thing is that we are not taking any future loans and we are not in any debts,” he adds. It’s a strategy that looks set to pay off in dividends.
Free of the “headache” of repayments, Shaikhani says the group is now in a strong enough financial position to leverage the opportunity of the soon to recover regional real estate and property development markets, allowing for further exploration into project opportunities.
Currently, the firm has six projects under construction.
“On the real estate side in 2011, there were a lot of projects here and I would say that 2011 was a year of stability.
“Now the market is getting a certain supply in specific areas, which 2011 is set the direction, 2012 should see movement,” echoes Arif Majeed, who works directly for Shaikhani subsidiary, Memon Investments.
The group’s Dubai projects span residential, commercial and leisure developments such as Sports City and Silicon Oasis. Beyond the Emirate, and even Middle East, over 30 the last years Shaikhani Group has executed projects in 90 countries.
In light of the continued financial instability the group’s plan for 2012 is to focus on the “big projects”, such as villas and communities, highway infrastructure and the construction and development of projects in Qatar, Saudi Arabia and Iraq.
Taking on a “renewed strategy for growth”, the focus today remains on clients and end users – “the best advert”, according to the group.
“2011 was setting the direction of the market. This year the projects we’ve launched on the development side have been targeted to communication and are close to completion, so 2012 will see the company expanding the projects that we have launched,” asserts Majeed, who elaborates to say that expansions will also cover geographical markets, including Russia and Europe.
The Shaikhani Group
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