FutureBrand's 2007 Gulf Real Estate Study


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The Gulf Real Estate Study showcases an ever-expanding category in a thriving development region. Generating a huge amount of interest and launched to standing room crowds year after year, GRES is an extensive exploration and assessment of the real estate category in the GCC that examines the driving forces, trends and insights related to branding in the Middle East.

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FutureBrand's 2007 Gulf Real Estate Study

  1. 1. PROUD SPONSOR FUTUREBRAND’S 2007 GULF REAL ESTATE STUDY WWW.ISTITHMAR.AE This is the third year that FutureBrand, a premier global brand consultancy, has issued its Gulf Real Estate Study. Each year it becomes more comprehensive, extensive and insightful. This year is no exception. Substantial qualitative and quantitative research was conducted, and experienced global teams explored new trends, themes and insights in the category. The result is the FutureBrand is a full service global branding firm. Shaping with Strategy. only comprehensive assessment, from a marketing Communicating with Design. Implementing for Impact and Reach. We build The Real Estate Division of Istithmar is perspective, of the region’s most prolific industry. real estate brands that aim to increase value and sales velocity, inspire wanderlust the proud sponsor of this year’s Study. SHARE YOUR COMMENTS and fire imaginations – all over the world. www.futurebrand.com VISIT OUR BLOG AT: WWW.FUTUREBRAND.COM/GRES
  2. 2. FUTUREBRAND’S 2007 GULF REAL ESTATE STUDY FUTUREBRAND’S 2007 GULF REAL ESTATE STUDY THE FUTUREBRAND PHILOSOPHY Having worked with leading companies all over the world, including the Gulf ’s most notable developers, POSITION AND ACTIVATION FutureBrand has unparalleled experience in pioneering brands. We believe that understanding our clients’ The network of customers in any category is rarely industries as well as they do is mandatory. However, it straightforward. The sketch here, showing the is FutureBrand’s core philosophy that sets us apart. landscape of sample real estate buyers, is no exception. Understanding the needs and requirements of each Our point of differentiation begins with our segment, and its relative importance, is a difficult name — our focus on the future — and a challenge when behaviors and needs may appear framework that helps clients build brands that similar. FutureBrand helps clients to navigate this are holistic and future-proof. A true ‘FutureBrand,’ constellation of interdependencies and can for us, creates a new definition of brand excellence, assist in prioritizing real opportunities which we shape in two ways. over distractions. Equally vital is knowing why, how and BRAND FRAMEWORK when to activate a compelling brand. Creating an actionable blueprint for how to move a brand forward is First we develop a strategic framework for your brand, critical. identifying what is essential and what is its core essence. Using deep category insights, we define the opportunity A ‘FutureBrand’ is architected to and create a value proposition for your business and leverage its core essence, to stand its brand. out relative to competitors and to engage customers for the long term. We believe a ‘FutureBrand’ is excellence in branding, and YOUR CUSTOMERS we strive to create brands that think ahead and stay ahead. For brands to excel, they not only need to be targeted, but also fine tuned to the needs of diverse audience segments and their relative brand adoption requirements. Research provides us with a considered viewpoint about where your customers may reside on the path between awareness and advocacy, and what can trigger their decisions to buy or invest. Our philosophy is straightforward because it is rooted in basic human truths. We uncover what people need and what motivates them. We then couple this with an understanding of when and how customers make purchase decisions. Both are critical to ensuring marketing success and building brand differentiation for the long term. Lastly, we design brands that provoke a positive reaction, create an emotional bond and deliver measurable results. 1 2
  4. 4. FUTUREBRAND’S 2007 GULF REAL ESTATE STUDY FUTUREBRAND’S 2007 GULF REAL ESTATE STUDY 2007 YEAR IN REVIEW DEVELOPMENT CONTINUES TO ADVANCE AT BREAKNECK SPEED IN THE DEVELOPMENTS ARE GROWING IN SCALE, THEY ARE BEING CONSIDERED 2006 NOTABLES REGION, WITH BRANDS VYING FOR ATTENTION. REGULATORY BOARDS AS DESTINATIONS IN AND OF THEMSELVES. OFTEN THEY NEED TO MARKET CONTINUED DELAYS BRAND NAMES SEEK ACTION AN AVALANCHE OF TOWER CITIES ARE FORMING, CUSTOMER ASSOCIATIONS CONTINUE TO BE CREATED AND THEMSELVES AS PLACES AND NOT JUST AS BUILDINGS. Buyers are frustrated, angered and From residential buildings to High-rise metropolises emerge and THE CATEGORY IS, ON THE WHOLE, MATURING. CUSTOMERS HAVE HIGHER only occasionally compensated. museum complexes, big names are residents shudder. EXPECTATIONS AND MORE TO CHOOSE FROM, AND THEY REQUIRE MORE A BRAND, IN ITS HIGHEST STATE, SHOULD CREATE AN IDENTIFIABLE, involved in Gulf developments. ATTENTION THAN EVER BEFORE. COMPELLING AND UNIFYING PLATFORM. TO ACHIEVE THIS, THE ROLE OF BRAND BUILDING MUST ACCOMPANY EVERY ASPECT OF THE BUSINESS, AS THE MARKET OVERLOADS WITH COMPETITIVE MESSAGES, PROMISES FROM CONCEPT AND PRODUCT DEVELOPMENT THROUGH TO SALES, PROPERTY FEVER RENTS INCREASE HOMEOWNER ASSOCIATIONS AND OVERPROMISES, BRANDING BECOMES MORE CHALLENGING CULTURE BUILDING AND EMPLOYEE TRAINING. WITH EVERY CUSTOMER The category continues to boom in High demand continues to hike Buyers organize, and publicize, and AND MORE CRITICAL FOR SUCCESS. ADDITIONALLY, AS REAL ESTATE TOUCHPOINT, REAL ESTATE BRANDS HAVE AN OPPORTUNITY TO CREATE more geographies. up rents across the board, despite the government is listening. PREFERENCE, LASTING VALUE AND RETURN ON INVESTMENT. government decrees. RISING CONSTRUCTION COSTS VILLA SHORTAGES LEISURE EXPANDS TOTAL DEVELOPMENT PROJECTS, BOTH PLANNED AND UNDERWAY Contractors are calling the shots. Ready-to-move-in villas are a buyer’s wish, but scarce. Golf courses, community centers and sports facilities continue to expand, IN THE UAE, INCREASED BY 79% FROM 2006 TO 2007. 1 with marinas and related maritime amenities also on the rise. NEWS AND NOTEWORTHY NEW NOTABLES SOFT/PRELAUNCHES METRO POWER RETIREMENT TARGETING The value of all GCC real estate projects announced in the last year Office rents in Dubai now rank just outside the top 10 on a global More developers, including Nakheel Demand for real estate near planned The government of Bahrain is alone (2006-07) has increased 59% to $143 billion.2 basis, at around $89.60 per sq. ft., compared with 10th placed Hong and Omniyat, are using soft and Dubai Metro stations is high and plots targeting expatriates who have worked Kong, with rents around $97.20 per sq. ft.9 prelaunches to test reaction to new are commanding price premiums. in any of the five other GCC countries GCC retail space will triple to more than 161 million sq. ft. marketplace offerings and pricing. for 15 years. This segment can now by 2016.3 Abu Dhabi is scheduled to award $7.6 billion of projects to live in Bahrain after retirement, contractors in 2007 and increase this figure to $9.5 billion in 2008.10 suggesting it will contribute to According to the Dubai Land Department, land prices are up an the growth of consumption and a average of 64% from last year.4 The population of Abu Dhabi is set to double within the next SPA WITH THAT APARTMENT SWEEPSTAKES FEVER livelier economy.16 10 years.11 Almost every development is now In addition to Damac Properties, a Construction in Dubai has grown by an average of 32.7% a year featuring a brand name luxury spa company known for plane and car since 2001.5 Bahrain has a remarkable 27.4% average growth per annum in its facility in addition to a gym on site. giveaways, Omniyat Properties has overall real estate sector.12 now launched a high profile $4.35 The value of mortgages in Dubai rose by 170% above the previous million giveaway. year, to $11 billion.6 Oman and Qatar are both showing an impressive 10% growth in the residential sector.13 Dubai ranked as the 14th most expensive city in the world in LATEST PARTNERING ENTERTAINMENT ORIENTATION COST OF LIVING/INFLATION which to rent accommodation.7 The Kuwait real estate market saw considerable growth, with No longer pairing famed designers From the purchase of the QE2 by Rising inflation and cost of living is a sales and number of units rising by 67% and 46% respectively, and furniture brands, developers Istithmar to Warner Bros. signing threat to Dubai and an opportunity for Dubai alone has 24 million sq. ft. of commercial space currently compared to the same period last year.14 are now partnering with electronic, with Aldar to create a theme park neighboring locales. Some companies under development and is ranked third in terms of global office jewelry and cigar brands to create the complex, entertainment offerings are are now less prone to relocate to real estate construction activity. Moscow and Shanghai take the Saudi Arabia’s fastest growing sector is real estate, with more than ultimate residential experience. becoming increasingly substantial in Dubai due to spiraling costs. Dubai’s top two spots.8 $260 billion in investments. This growth is deemed to be the second size and more high profile. rate of inflation is 10%, about equal highest in the world, after Shanghai.15 to Russia’s.17 5 6
  5. 5. FUTUREBRAND’S 2007 GULF REAL ESTATE STUDY FUTUREBRAND’S 2007 GULF REAL ESTATE STUDY EMERGING TRENDS MORE FOR GOVERNMENT TAKES EXPORTATION BUYERS CONTROL AND EXPANSION MATURING MARKETING CAMPAIGNS REAL ESTATE REGULATORY AUTHORITY EXPORTING DUBAI SUCCESS ABROAD EXPANDING EMIRATES Developers are using more than large billboards and newspaper To better control the burgeoning development market, customer While the Gulf may be one of the most We noted the growing prominence of other Fujairah is another quiet emirate moving wrap-around ads to promote their offerings. The rise of multimedia complaints, and general compliance, the Dubai government prolific real estate markets in the world, emirates last year that were leveraging their forward swiftly. Its striking landscape and campaigns, linking television, radio, print and online advertising, has created the Real Estate Regulatory Authority (RERA). This many domestic developers are expanding proximity to Dubai. Ras Al Khaimah is Indian Ocean beachfront make for an idyllic is creating more cohesive marketing programs. government entity will establish policies and best practices regarding their capital and influence overseas. Emaar notable in its advancement, with its GDP spot, as this emirate focuses on becoming a freehold property, 99-year leases and the rental market in Dubai. has been one of the earliest to extend its growing from $1.7 billion in 2001 to $2.5 resort and hospitality destination. This year’s PRICING INFORMATION reach into the United States. It has launched billion in 2005, with mining, manufacturing successful sales launch of Mina Al Fajer, a The publishing of list prices is becoming popular with Emaar, among RENTAL INITIATIVES projects worth more than $110 billion and real estate all showing strong growth.20 $164 million mountain-sea resort property, others. More developers are featuring pricing details prominently New rental laws, mandating the relationship between tenant and outside the UAE.18 In RAK, ‘the rising star of the UAE,’ tourism which will include a 200 room five-star hotel in select print ads and online. landlord and requirements for authenticating and registering rental and real estate sectors have been the most managed by Fairmont Hotels & Resorts, is contracts, are under development in an effort to better control Nakheel has launched Nakheel International. active to date, both taking advantage of the an indication of more to come. MODEL HOMES AND SUITES Dubai’s rental market. Additionally, there is discussion of relaxing Limitless has announced projects in emirate’s 40 km coastline, rugged Hajjar Developers are giving buyers a chance to see the finished product and the 7% rent cap issued earlier this year, and a decision is expected China, Vietnam and Pakistan.19 ETA Star mountains and property prices 40% EXPANDING INTERESTS further communicate a lifestyle orientation by showcasing model by December, 2007. is developing projects in Bangalore and below rates in Dubai.21 RAK Properties, As the development market matures, homes and suites. As developments come closer to completion, site Chennai, India, while Damac has projects Rakeen, Orascam and Saraya are all actively interests are expanding into different areas of tours will be on the rise. TRUST ACCOUNT LAW in Egypt, Qatar and Lebanon among others, developing projects in RAK. real estate. In 2004, investors were generally The newly announced Trust Account/Escrow Law requires with further aggressive expansion plans. seeking vacant residential land. In 2005, MORE FINANCING OPTIONS developers to keep buyers’ deposits in escrow accounts rather than Ajman, marketing itself as a place to get people were looking for residential buildings Many projects now have a variety of lenders on board, representing allowing developers, without some form of independent certification away from busy city life, has one of the to purchase and in 2006 investors were more lending options. Mortgage providers are now linked with permitting fund release, to pay this money early to contractors as a UAE’s most active property sectors. Close favoring built commercial buildings, as their developers directly through signage, collateral and in advertising to project advances. This may cause some complications to developers to 200 residential towers are either under return on investment was fastest.23 streamline and minimize buyer efforts to secure funding. in securing timely contracting offers and managing their cash flow; construction or have been completed since however, the law is expected to create a higher level of confidence 2004. Many consider Ajman the new Sharjah. and credibility in the marketplace. Prices are said to be four times lower than those in Dubai.22 7 8
  6. 6. FUTUREBRAND’S 2007 GULF REAL ESTATE STUDY FUTUREBRAND’S 2007 GULF REAL ESTATE STUDY DUBAI 2015 AND ABU DHABI 2030 ARE MACRO VIEWS OF A BOLD BRIGHT FUTURE ACROSS INDUSTRY, ENVIRONMENT AND ECONOMY DUBAI ABU DHABI 2015 2030 TOURISM TRANSPORTATION CONSTRUCTION FINANCIAL SOCIAL INFRASTRUCTURE CULTURE TRANSPORTATION ENVIRONMENT PUBLIC SOCIAL SUSTAINABILITY SERVICES DEVELOPMENT HOUSING DEVELOPMENT “WE HAVE TO MAKE HISTORY… NOT WAIT FOR “THOSE WHO FORGET THEIR PAST, THE FUTURE TO COME TO US” COMPROMISE THE FUTURE” HH SHEIKH MOHAMMED BIN RASHID AL MAKTOUM HH SHEIKH ZAYED BIN SULTAN AL NAHYAN 2.5 MILLION RESIDENTS 3 MILLION RESIDENTS 40 MILLION VISITORS 7.9 MILLION VISITORS 110,000 HOTEL ROOMS 74,500 HOTEL ROOMS 650,000 RESIDENTIAL UNITS 686,000 RESIDENTIAL UNITS Dubai has already established itself as a model future city, with visionary expansion plans The capital, Abu Dhabi, is emphasizing culture, people and environment. It is looking and continued diversification. Dubai is concentrating on sectors of strength including to enrich the city and promote balance, focusing on low income housing, public tourism, transport, trade, construction and financial services and has prioritized social transportation and a green orientation.With size, commitment and money to spend, development, infrastructure and security/safety to ensure that it matures into a vibrant Abu Dhabi is seeking to preserve the richness of its culture and not assimilate into a generic cosmopolitan city of high standards and quality.37 destination. It is proudly building a world-class city of excellence.38 9 10
  7. 7. FUTUREBRAND’S 2007 GULF REAL ESTATE STUDY FUTUREBRAND’S 2007 GULF REAL ESTATE STUDY THE REGION AT MANAMA, BAHRAIN DUBAI, UAE MUSCAT, OMAN Developers are hustling to build residential and office space Dubai’s residential and commercial space pipelines are still As in many of the other GCC countries, land and property to support the emerging financial centers of Bahrain World rich, with planned or underway projects valued at $318 prices are on the upsurge in Oman. As increasing numbers A GLANCE Trade Center, Bahrain Financial Harbour and Bahrain Investment Wharf. There is considerable buzz around the mixed-use projects in the pipeline driving foreign investment and attracting tourism. Still, native Bahrainis billion over the next decade.27 In the residential sector, many experts predict that demand will continue to outpace supply. Resultantly, home sales and rental prices continue to rise considerably. It is reported that apartment rental rates of expat workers move to the country and more and more Omanis choose to rent rather than build homes, demand in the rental market is growing.29 According to the Times of Oman, rental prices rose 12%-15% in 2006, most severely DUBAI AND NEIGHBORING REGIONS ARE await more affordable sale and rental options to come increased 2% on average, whereas villas have increased 12% in Muscat.30 BENEFITING FROM CONSUMER CONFIDENCE IN onto market. in the second quarter of 2007.28 The promising news for consumers is that home financing options are more readily THE EMIRATE. INVESTORS ARE DIVERSIFYING available and fixed rental contracts are on the horizon. THEIR PROPERTY HOLDINGS WHILE END-USERS 2007 UPDATES & MILESTONES ARE RETREATING TO OTHER UP-AND-COMING 2007 UPDATES & MILESTONES • THE WAVE LAUNCHED ITS LATEST COLLECTION OF FIRST- • LULU ISLAND WAS RELAUNCHED AS REEF ISLAND OF-ITS-KIND PROPERTIES AT SINESLA ISLAND, THE FIRST AREAS IN THE UAE AND GREATER GCC. • BAHRAIN BAY WAS OFFICIALLY LAUNCHED WITH THE 2007 UPDATES & MILESTONES RESIDENTIAL ISLAND NOT ONLY ON THE DEVELOPMENT, BUT IN PARTICULAR, COMPETITION IS HEATING UP UNVEILING OF ITS MASTERPLAN • THE FIRST VILLAS AND SHORELINE APARTMENTS ON THE ALSO IN THE SULTANATE BETWEEN ABU DHABI AND DUBAI TO CREATE • AMWAJ ISLANDS HAS A NEW CORPORATE IDENTITY INTENDED PALM JUMEIRAH WERE HANDED OVER • THE BLUE CITY ANNOUNCED ITS DEVELOPMENT TIMETABLE, BENCHMARK-SETTING, HIGH-PROFILE PROJECTS. TO RAISE INTERNATIONAL AWARENESS • ALL THREE PHASES OF BUSINESS BAY SOLD OUT WITH THE MASTERPLAN AND INITIAL ARTISTS’ IMPRESSIONS • CONSTRUCTION OF THE FIRST FOUR SEASONS HOTEL IS • THE REVISED MASTERPLAN OF THE PALM DEIRA WAS UNVEILED OF THE FIRST PHASE TO BE REVEALED IN OCTOBER UNDERWAY • THE QE2 WAS PURCHASED BY ISTITHMAR • THE COUNCIL OF MINISTERS ANNOUNCED A 15% CAP ON • RIFFA VIEWS CONTINUES TO SELL THE KINGDOM’S PREMIER • BURJ DUBAI BECAME THE WORLD’S TALLEST FREE-STANDING RENT HIKES FOR TWO YEARS31 GOLF COMMUNITY VILLAS STRUCTURE, AT 150 STORIES • OMAN’S SHANGRI-LA BARR AL JISSAH RESORT AND SPA, • THE LOST PARADISE WATER PARK AND BANYAN TREE SPA • THE FIRST JUMEIRAH BEACH RESIDENCE UNITS WERE INCLUDING THREE HOTELS, OPENED JUST OUTSIDE MUSCAT RESORT WERE LAUNCHED AT AL AREEN HANDED OVER TO RESIDENTS • MARINA WEST, A DEVELOPMENT WITH 11 RESIDENTIAL • DAMAC LAUNCHED SIGNATURE RESIDENCES. TOWERS AND A MARINA ON THE CAUSEWAY THAT CONNECTS • DUBAI WORLD CENTRAL PHASE 1 CONSTRUCTION BEGAN KSA TO BAHRAIN, WAS ANNOUNCED DOHA, QATAR Construction of large-scale, mixed-use developments is booming in Qatar. Communities are nearing city proportions, with The Pearl expected to house upward of 40,000 people. It is estimated that real estate demand is four times that of supply.24 Development professionals in the country believe that the continued rise in prices is due to increased costs associated with legislated mandates to ABU DHABI, UAE Abu Dhabi has made recent headlines with the announcement of a number of cultural improve construction standards along with the practice of projects on Saadiyat Island connected to world-renowned establishments and architects. The subletting by middlemen to expat workers.25 emirate is becoming a bustling metropolis, not only through building cultural attractions but also in offering more affordable residential prices (for now). As reported by HSBC Global Research, average residential property prices are almost 10% cheaper in the UAE capital than 2007 UPDATES & MILESTONES in Dubai.26 • AT THE PEARL, THE CREATION OF THREE COVES, 32 KM OF SHORELINE, NAVIGABLE CANALS, AND FLOODING OF THE 3 MARINAS HAS BEEN COMPLETED 2007 UPDATES & MILESTONES • THE PEARL ALSO UNVEILED THE OYSTER SALES AND • FRANK GEHRY IS DESIGNING THE GUGGENHEIM ABU DHABI, AND ZAHA HADID IS THE ARCHITECT MARKETING CENTRE, ITS TECHNOLOGICALLY ADVANCED BEHIND THE PERFORMING ARTS CENTRE SALES AREA SHAPED LIKE THE SHELL OF AN OYSTER • IN ITS FIRST INTERNATIONAL EXPANSION, THE LOUVRE WILL COME TO ABU DHABI AND BE DESIGNED • AT LUSAIL, A SIGNIFICANT NUMBER OF LAND PLOTS HAVE BY JEAN NOUVEL BEEN SOLD AND THE FIRST RESIDENTIAL PROPERTIES AND • TADAO ANDO IS DESIGNING THE MARITIME MUSEUM TO SHOWCASE THE CAPITAL’S MARITIME HISTORY OFFICES ARE SLATED FOR OCCUPATION IN 2010 • THE DESIGN OF THE INFRASTRUCTURE OF AL REEM ISLAND IS NEARLY COMPLETE • SAMA DUBAI IS CREATING “DUBAI TOWERS,” A CONCEPT • FERRARI WILL CONSTRUCT THE FERRARI THEME PARK ON YAS ISLAND TO EXPORT DUBAI TO DOHA AND OTHER CITIES AROUND • CAPITAL CENTRE LAUNCHED ABU DHABI NATIONAL EXHIBITION CENTRE (ADNEC) AND BEGAN SELLING THE WORLD LAND PLOTS 11 12
  8. 8. FUTUREBRAND’S 2007 GULF REAL ESTATE STUDY FUTUREBRAND’S 2007 GULF REAL ESTATE STUDY THIS YEAR’S BUZZ: LEISURE LIFESTYLE THERE ARE MANY PROJECTS IN THE GULF ADDRESSING SUSTAINABILITY OR ENVIRONMENT & ENVIRONMENTAL ISSUES IN THEIR MESSAGING: SUSTAINABILITY As evidenced by this year’s Cityscape Dubai “green” theme, all eyes are on sustainability in the Gulf. The UAE will soon launch THE GULF’S REAL ESTATE BOOM CONTINUES a green building code, modeled on the US Leadership in Energy TO ATTRACT A GROWING INTERNATIONAL and Environmental Design (LEED) system. While the Green Community pioneered this in the region, developers are abuzz AUDIENCE. THE REGION’S CLIMATE, with planning eco-friendly and sustainable projects. Sustainability INFRASTRUCTURE, SOPHISTICATED is becoming tablestakes for serious developers. They cite advantages ATTRACTIONS AND SHOPPING ARE MAKING for all involved: IT A PREMIER LEISURE DESTINATION FOR • Regional governments can set new international standards LOCAL, REGIONAL AND INTERNATIONAL • Cities can reduce energy and water consumption VISITORS. • Corporate tenants and home owners can reduce operating and energy costs • Clean energy and environmental technology companies can push forward their work CEOs and development executives across the region are championing the growing cause: “AT SAMA DUBAI, WE RECOGNIZE THAT OUR OPERATIONS HAVE A With tourism growth more than 20% higher than the PROFOUND ENVIRONMENTAL IMPACT. OUR GOAL IS TO SOLICIT INCREASED worldwide average, the region is continuing to become PARTICIPATION IN SUSTAINABLE ENVIRONMENTAL PRACTICE. FROM THE a thriving destination. ONSET, OUR VISION HAS BEEN TO CREATE A COMPANY THAT FOCUSES NOT ONLY ON THE SINGLE-MINDED PURSUIT OF RETURNS, BUT ON A BROADER From the continued development of premier golf AGENDA THAT INCLUDES RESPECT FOR EMPLOYEES, ENGAGEMENT WITH courses, luxury marinas, yacht clubs, special retail THE COMMUNITY AND CONCERN FOR THE ENVIRONMENT.”32 complexes and famed restaurants, leisure is becoming a — Farhan Faraidooni, CEO, Sama Dubai key development focus and an area of opportunity. The bar is continuing to be raised on exceptional hospitality “NAKHEEL HAS THE LARGEST IN-HOUSE DEDICATED ENVIRONMENTAL and lifestyle amenities, from their size and scale to TEAM OF ITS TYPE IN THE REGION, AND ISSUES OF ENVIRONMENTAL famous names and distinctive design. SUSTAINABILITY HAVE BEEN A FUNDAMENTAL FOCUS FROM THE COMPANY’S INCEPTION.”33 A variety of support products are appearing across — Chris O’Donnell, CEO, Nakheel multiple price points to a hungry marketplace of visitors and occasional residents. From timeshares, fractional “WE RECOGNIZE THE IMPORTANCE OF SHARING AND PROTECTING OUR ownership, private club residences and condo hotels ENVIRONMENT. BAHRAIN BAY IS COMMITTED TO HELPING DEVELOP to serviced apartments, destination clubs and private A COMMERCIALLY SOUND AND ECOLOGICALLY VIABLE APPROACH TO leased resort villas, a more sophisticated and segmented DEVELOPMENT.”34 range of offerings is presenting itself. — Bob Vincent, CEO, Bahrain Bay Gulf nationals will spend $1 billion on shared leisure “THE BUILT ENVIRONMENT HAS A VAST IMPACT ON THE NATURAL ownership over the next 12 years, indicating the growing ENVIRONMENT, AFFECTING HUMAN HEALTH AND ECONOMY. IF DEVELOPERS significance of this segment.36 ADOPT GREEN BUILDING STRATEGIES, THEY CAN NOT ONLY CONSTRUCT SUSTAINABLE COMMUNITIES WITH INDOOR ENVIRONMENTAL QUALITY, While some will choose to purchase a vacation or second BUT CAN ALSO SUPPORT THE PRESERVATION OF ENERGY AND WATER home amid scenic golf courses or in a soaring tower RESOURCES.”35 above a vibrant marina, leisure will continue to play a — Hashim Al Dabal, CEO, Dubai Properties critical role in owner value creation and experience. 13 14
  9. 9. FUTUREBRAND’S 2007 GULF REAL ESTATE STUDY FUTUREBRAND’S 2007 GULF REAL ESTATE STUDY SAMPLING GLOBAL CONDO LUXURY TRUMP INTERNATIONAL INSIGHTS Name PETROV DOM ONE HYDE PARK 55 WALL STREET LE REVE ST. REGIS PARAMOUNT BAY HOTEL & TOWER RELATIVE TO OTHER MAJOR INTERNATIONAL Developer Group Yress Candy & Candy Witkoff Group & Cipriani Dubai Luxury Homes/ Starwood Hotels & Royal Palm Communities Talon International MARKETS, DUBAI REMAINS A BARGAIN. TODAY, Arabtec Construction Resorts Worldwide, Inc., Development THE PRICE FOR A LUXURY CONDOMINIUM Grupo 1818, Ideurban CAN EASILY SOAR ABOVE THE $1,000 PER Country SQ. FT. MARK. Architect AM Alexandrov and Partners Rogers Stirk Harbour Isaiah Rogers, McKim, Atkins, YS Space Singapore, Cesar Pelli and Associates, Arquitectonica, Zeidler Partnership Architects MOSCOW, LONDON AND NEW YORK RANK AS & Partners Mead & White, Tsao & KCA London, WA Yabu Pushelberg (interiors) RTLK (interiors) SOME OF THE MOST EXPENSIVE CITIES IN McKown (interiors) International Dubai (interiors) THE WORLD TO LIVE IN, AND THE PRICES OF THE EXAMPLES LISTED HERE REFLECT THAT Floors 10 14 9 50 31 46 70 STATUS. SO WHAT CAN $1,000 PER SQ. FT. GET # Units 28 86 106 82 100 346 438 YOU RELATIVE TO DIFFERENT CITIES? FOR THAT PRICE, YOU CAN BUY NEARLY DOUBLE Completed 2006 2010 (expected) built 1836, renovated 2006 2006 2007 (expected) 2009 (expected) 2010 THE SPACE IN DUBAI THAN YOU CAN IN NEW Building gazebos gyms & spa 24-hour doorman gym & spa gym & spa (Remede) gym & spa 24-hour personal concierge YORK CITY. ADDITIONALLY, YOU GET BUILDING amenities winter gardens swimming pools Cipriani butler 24-hour security boutiques pool 24-hour valet AMENITIES SUCH AS CONCIERGES, GARDENS, 24-hour security squash court housekeeping suites for guests restaurants concierge 24-hour room service SPAS, GYMS AND YOUR OWN STORAGE SPACE. video surveillance private wine-tasting facility preferred access to onsite concierge concierge technology concierge personal attaché service underground parking room service Cipriani restaurant valet parking St. Regis Butler Service butler service daily housekeeping BEYOND THESE CATEGORY-WIDE SERVICES, underground storage business center fitness center roof garden personal chef screening room daily laundry service CONSUMERS ARE DEMANDING MORE NICHE 24-hour concierge courtyard & rooftop garden butler and maid service wine cellar business center in-room dining LIFESTYLE ELEMENTS, INCLUDING SCREENING 3 boutiques private storage specially decorated ballroom Paramount Style Club spa ROOMS, WINE CELLARS AND PRIVATE CLUBS. underground parking with personal shopping services high speed elevators meeting rooms adjoining courtyard with pool THEY ARE ALSO LOOKING FOR DETAILED license plate recognition post and messenger services business center shops and restaurants fully-equipped gym INFORMATION ABOUT EACH UNIT — FROM private elevators (additional amenities available three restaurants APPLIANCE NAMES TO MATERIAL USED FOR covered garden spaces to Cipriani Club members) business center SURFACES IN EACH AND EVERY ROOM AND MONTHLY SERVICE CHARGES. Unit details panoramic windows, penthouse apartments classic, sleek and eclectic 13-foot ceilings, wireless mosaic details and stone wireless touch screen 11-foot ceilings, floor-to- balconies, fireplace, have bullet proof windows, residence styles fully furnished Internet, smart home countertops in kitchen, technology, stone countertops, ceiling windows, formal mosaic tiles, central air, specially purified air, with furniture to choose from technology, kitchen appliances opaque marble floors, onyx Sub-Zero refrigerators and living & dining rooms, satellite TV, Internet iris scanners and by Ricci Milan of Italy sink and Jacuzzi in bathroom, other brand name fittings, designer kitchen, electric panic rooms help quarters in some units energy efficient appliances fireplace, wireless Starting price $6,600,000 $8,100,000 $2,850,000 $4,100,000 $657,000 $3,050,000 $2,555,000 Price per sq.ft. $1,905 up to $8,427 $1,398 $663 $1,000 $997 up to $1,210 Key “Privacy and luxury in “A new residential scheme “Whatever your personal “Living the Dream” “A new view of Mexico City” “Destination Lifestyle” “An incredible new standard messaging a historical setting” whose beauty, luxury style – own the good in luxurious living” and prestige will place it life – Cipriani-style” in a class of its own” 15 16
  10. 10. FUTUREBRAND’S 2007 GULF REAL ESTATE STUDY FUTUREBRAND’S 2007 GULF REAL ESTATE STUDY PROLIFERATION OF LUXURY 1 2 3 4 5 6 7 8 9 10 11 12 In a single travel magazine with international readership, there are 16 real estate ads for GCC properties that all center on a luxury message. The majority of real estate ads attempt to sell luxury through their images of rich interiors, relaxed residents and buildings that soar to great heights. Many also incorporate the words “luxury,” “deluxe” and “luxurious” explicitly into their descriptions of amenities and lifestyle. BRANDS HAVE BEEN REMOVED FROM THESE ADS. 13 14 15 16 CAN YOU GUESS WHICH ADS BELONG TO WHOM? Pentominium 16. Cayan, Infinity, Silverene Tameer, Elite Residence 14. RAK Properties, Mina Al Arab 15. Trident Sunland, D1 11. Trinity Developers, La Mer 12. Hydra Properties 13. Al Bahrain 9. Ascott International, Somerset Al Fateh 10. Emirates Bavaria City Suites 6. Trident, Pentominium 7. Star Boutique 8. Durrat – Marina 4. Damac, Wildflower 5. Bavaria Hotels International, Marina Residences 3. Tamani Hotels and Resorts, Tamani Hotel 1. Union Properties, Limestone House 2. Hircon International, 23 Answers: 17 18
  11. 11. FUTUREBRAND’S 2007 GULF REAL ESTATE STUDY FUTUREBRAND’S 2007 GULF REAL ESTATE STUDY QUANTITATIVE PERCEPTIONS FutureBrand worked with a global independent research firm to conduct a quantitative study of 300 home buyers and development professionals in the UAE and Bahrain. This research allows us to better understand attitudes and perceptions of communities and developers, along with the factors that influence purchase decisions. Best Best Best Best Best Golf Best Developer Waterfront Island Community Community Overall Community Community for Families Community PERCEPTUAL DRIVERS — DEVELOPER ATTRIBUTES Attention to details Luxurious homes PERCEPTUAL DRIVERS — MARKETING CHANNELS Sales center Website This chart depicts the relative importance of developer Emaar 4.5 Emaar 4.7 This graph portrays the relative importance of various Emaar 4.6 Emaar 4.6 attributes in terms of their ability to predict a home buyer’s or marketing channels in influencing attitudes toward a developer. Nakheel 4.4 Nakheel 4.4 The developers on the right are the best performers.* building professional’s predisposition toward a developer. On Nakheel 4.3 Nakheel 4.3 the right, are the top scorers against key attributes.* Y. K. Aldar 4.3 Aldar 4.0 Aldar 4.1 Almoayyed 4.3 Attention to details 29% High quality construction 17% Sales center 25% Access to roads 11% High quality construction Desirable locations Advertising Brochures Advertising 21% Reasonably priced 9% Emaar 4.6 Emaar 4.5 Emaar 4.6 Emaar 4.6 Favorable financing terms 6% Overall service before the sale 12% Secure 5% Nakheel 4.3 Nakheel 4.3 Responsive service after the sale 9% Nakheel 4.2 Aldar 4.3 Luxurious homes 5% Desirable locations 4% Aldar 4.2 Aldar 4.1 Model showrooms or model villa 8% Aldar 4.1 Nakheel 4.2 Premium amenities 3% Professional/courteous salesperson 7% Most iconic/innovative homes 3% “Attention to details” is the Sales centers and advertising Reasonably priced Videos 6% Videos On time delivery 2% most important attribute of a are the two most important Well-planned units 2% Emaar 4.4 developer, and Nakheel, Emaar Website 5% Emaar 4.7 marketing channels. Sales Affordable homes 2% and Aldar stand out as the centers create a cohesive, Spacious homes 1% Nakheel 4.3 developers perceived to be the Brochures 5% Nakheel 4.3 unmistakable impression of Sufficient parking 1% best performers against this. a project, while advertising Service over the phone 2% Technology friendly 0% Aldar 4.1 Damac 4.2 creates awareness and a presence for a developer in the marketplace. *Five-point performance scale: from 1 = unacceptable to 5 = great. *Five-point performance scale: from 1 = unacceptable to 5 = great. 19 20
  12. 12. FUTUREBRAND’S 2007 GULF REAL ESTATE STUDY FUTUREBRAND’S 2007 GULF REAL ESTATE STUDY DEVELOPER FAMILIARITY DEVELOPERS CONSIDERED DEVELOPER CONVERSION ADDITIONAL INSIGHTS (WITHIN OWN COUNTRY) EFFICIENCY • Technology friendly, well-planned units and premium Familiarity is an important attribute and is based on the Consideration is the most important precursor to purchase. Conversion efficiency speaks to each developer’s ability to amenities are attributes that the industry typically percentage of end users and building professionals who This finding shows the degree to which prospective buyers convert consumer familiarity into buyer consideration. performs well against. However, these attributes are of know a developer well enough to have an opinion about are predisposed to buying from various developers. lesser importance according to the research, indicating the company. that the industry may be over-allocating resources to Sorouh 48%91% achieve high performance here. Emaar 81% Emaar 48% 58% Dubai Properties 84% • Attention to details, high quality construction and Nakheel 58% Nakheel 43% luxurious homes emerge as the three primary leverage Damac 82% points in the category: they are comparatively important Damac 22% Damac 18% and the industry performs well against them. Attention to Nakheel 74% details is still an opportunity area because it is the single Dubai Properties 19% Dubai Properties 16% most important attribute, yet industry performance Aldar 69% against it is only a little above average. Aldar 16% Aldar 11% Y. K. Almoayyed 62% • Three of the leading brands in the region — Emaar, Y.K. Almoayyed 13% Sorouh 10% Nakheel and Damac — stand out as having higher levels Emaar 59% of familiarity with women than with men. However, Sorouh 11% Y.K. Almoayyed 8% these developers are similar to the industry standard in that men are significantly more likely than women to Three of the second-tier ranking brands, Sorouh, Dubai rate them as being “a brand for someone like me.” This Emaar and Nakheel are the dominant brands in this In terms of level of consideration, Emaar and Nakheel are Properties and Damac, rise to the top as the most efficient suggests there may be an opportunity to enhance the ranking, although Emaar leads by a statistically significant comparable. developers, while industry leader Emaar falls to the bottom effectiveness of a developer’s overall marketing program percentage. of the leading brands. by finding ways to improve their relevance to women. • Emaar has become the dominant brand in the category. The company’s familiarity is 40% higher than that of THE SHOPPING PROCESS DEVELOPER RELIABILITY the next leading brand, and it is the highest rated brand across each of the 16 developer attributes, with an average rating of 4.5 out of 5. The following chart details how many potential buyers explored and researched their interests throughout the home Perceived reliability is an important driver of both purchase buying process. and brand loyalty, especially in a region known for delays • Nakheel has emerged as the strong #2 brand in the and limited information. Note the low percentages, region. While Emaar is 40% more recognizable, Nakheel’s compared to familiarity and consideration levels. familiarity is 164% higher than the #3 brand. Further, Made sales inquiry and obtained brochures 65% with an average rating of 4.3 out of 5 across all 16 developer attributes, Nakheel’s brand image is not far behind Emaar’s. Emaar 25% Visited a sales center and met a salesperson 58% Nakheel 8% Aldar 6% Explored available financing options 55% Y. K. Almoayyed 6% DERIVED IMPORTANCE METHODOLOGY Damac 3% The relative importance of developer attributes and Saw a model flat or model villa 48% Dubai Properties 3% marketing channels was determined using multivariate regression. Asking research respondents their opinions Sorouh 3% about what is important is simply not reliable or accurate, as what people say and what they do are typically not Performed financial assessment of a specific home to purchase 41% aligned. Multivariate regression examines patterns in the Emaar, with a relatively low percentage of perceived data to identify how perceptions and attitudes correlate reliability, is ahead threefold over the next brand, Nakheel. with preferences. The numbers suggest that most respondents do not feel that Making inquiries and visiting a sales center are the most popular explorations for those seeking to purchase a home. developers today are reliable in their offerings. 21 22