Luxury has always been the most premium aspect of real estate market all over the world. To delve deeper into the luxury markets world over and understand what defines luxury in different countries, Magicbricks.com will be having exclusive chats with the leading developers in the world. The first in the series is Dubai’s renowned DAMAC Properties. Established in 2002, DAMAC Properties started off as a private, residential, leisure and commercial developer in Dubai and the Middle East. However, working in the market for over a decade, DAMAC Properties has handed over 8,887 units till date and has around 23,688 units in planning and development across the Middle East. Their buildings are known for their superior designs and craftsmanship. DAMAC is clearly the name deeply associated with luxury.
Magicbricks.com Content & Research Head E Jayashree Kurup had an exclusive conversation with Ziad El Chaar, the managing director at DAMAC.
Here are the excerpts –
What are the elements that define luxury – size, features, amenities, location, neighbourhood or the profile of the developer ?
Luxury by its very nature has to be high on quality. The starting point is quality. Location is also very important. Then the reputation of the developer is important, whether he has the experience to deliver the quality that he is promising. Luxury, after all, comes with a pedigree. The customer will ensure that you have established your name in the luxury property space. That will allow the buyer to assess whether you are a developer who can be trusted to deliver. Only when all this is in place can you achieve the price that luxury property commands.
Luxury, after all, is all about exclusivity. When you buy a Lamborghini, for instance, you do not want 500 of them around. Therefore luxury properties should have a unique design. You would also expect the developer to have the essential co-branding with brands such as Vercase, Fendi, Paramount etc. They should be capable of limited release of property with the developer.
Of the total number of real estate projects in the market, how many are in this category?
This varies from city to city. Monaco, for instance, will have 100 per cent luxury property. The need for luxury real estate is dependent on the affluence in the city.
Do developers concentrate on luxury properties alone or is the same developer building for multiple segments?
Developers who create luxury properties should specialize in the same. If specializing on luxury properties then they need special project management teams, the public relations and marketing teams should be focused on luxury and exclusivity.
How do you source the luxury buyers?
We appeal to them through economic and financial newspapers, luxury magazines, online and special exhibitions, and targeted road shows.
Face-to-face encounters are important. In most instances, we make sure that we meet the prospects face-to-face. When people are buying the primary property they are driven by considerations such as when they are getting married or when there are promotional mortgage rates. So we track these and work accordingly. Purchase of a second or holiday home is dependent on sentiment or disposable income. They buy when the financial situation is good and they have enough disposable income to spare for a premium purchase.
Who are the buyers – nationality, professional status etc?
Our buyers are from around the world. When a buyer purchases a second or third home outside the country, it clearly shows they like to travel. It also indicates a movement between companies or business. So, for example, we track how many Indian businesses are creating offices in Dubai. Then we are able to reach out to these potential buyers.
Is luxury real estate a good investment category?
There is an element of exclusivity in luxury real estate investment. However, in any real estate investment, maximum benefit to the buyer comes from a medium to long term period of 3-5 years. This is not true only during the global cycle of economic uncertainty which was a one-time phenomenon.
Do buyers hold on to the investment or sell when the leveraged value is high?
Our buyers mostly hold on to their purchases even if they are not living in it full time. There are different kinds of property needs. For those who want to lease out properties that are not occupied, we have a turnkey apartment option where the unit is fully fitted from a big screen television to a stool. When the buyer is not using it, the unit is leased out.
What is a good time to get into a luxury project?
This is a good time to buy luxury property in Dubai. There is a growing economy, international activities, tourism is growing. We have won The Expo 2020, which will take place six years from now. Last year the International airport was the busiest airport in the world with 57 million transitors.