Prospects of Property & Facility Management Business in UAE, being majority expatriate population, rental is always an good options for people shifting to UAE, not all can afford to buy apartment in country like UAE, which had very diverse population from all walk of life.
There lies an opportunity to serve landlords & tenants who will be your primary clients, in-line with this there are some other perks you get working with prominent landlords of selling their property, manging their complete portfolio, propose investment deals, etc.
This presentation is self-understanding and if strategies mentioned in them are implemented with talent than their is a lot of scope for success over the time. Networking is the key, from one landlord to second than third and so on, so to make this happen, you need to serve your landlords well so word of mouth brings more business to you.
3. DNA?
Often Organizations & Managements search endlessly on
options to succeed or look for a variable that will give them
an upper hand over their competitors, but in this quest
of thirst of success, they forget that one thing they want
is under their eyes, which is not recognized.
THE TEAM!
Huge advertisement budgets, capital, cash pool,
lavish interior of their office doesn’t promises a sure
shoot Success, what makes an DNA of successful
organization are the PEOPLE, the TEAM.
Like the foundation of Six Sigma says,
“do it right at first place”
Well said!
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4. BLUEPRINT
"blueprint" came to mean simply "plan", and it is often used in
a metaphorical sense when there is no actual drawing per se.
BEFORE WE GET INTO “ACTION”
IT IS VERY IMPORTANT TO
“PLAN THE ACTION”
In simple words, DATA
MANAGEMENT via
DATA MINING, the
more insight we have
about Market,
Economic Conditions,
Deliverable of Units,
Government Policies,
the better we are in
position to make
decision
01RESEARCH
There is always timing
for executing certain
decisions & process, to
decide those here and
moreover how we
reach from Point A to
point B, define both
points & what
between those two
points, i.e. A < = = > B
As the word says PLAN!
Equation for PLAN =
RESEARCH x TIMELINE /
PROCESS, more simple
what comes first,
second and so on…
PLAN divided by small
steps of documented
actions = PROCESS.
WHO does WHAT, at
what TIME, what
PLACE, with who’s
HELP, HOW & what is
NEEDED
02TIMELINE 03 04
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PLAN PROCESS
5. BRAINSTORMING
group discussion conducted to generate ideas…
UAE is one of those countries, where people come,
work & live from all walks of life, geography, age,
education background, beliefs, religion, experience &
perspective, which makes organization in UAE different
than other part of world.
Some ideas which didn’t worked in home country
market of these people, may get a momentum in UAE
market, as it is well said, NEW IS EXCITING!
It is very important management hear to all on board
to get varied thinking of individuals, we all bring
different inputs and we can choose the best for
organization. Next step is filtration of IDEAS!
presented by VISHAL DESAI ~ +971 55 389 8410
6. RESEARCH
DATA MANAGEMENT
via DATA MINING
Market
Economic Conditions
Deliverable of Units
Government Policies
Geography
Flexibility
AOF
(area of focus)
Variable Factors
presented by VISHAL DESAI ~ +971 55 389 8410
answers...
answers...
answers...
01 a
b
c
WHAT SHOULD BE DONE?
WHAT IS HAPPENING (FACTS)?
WHY IT IS HAPPENING (CAUSE)?
7. TIMELINE
What we are trying to
ACHIEVE in what TIME?
Hierarchy
Targets
Budgets
Marketing
AOF (Area of Focus)
answers...
answers...
answers...
02 a
b
c
WHAT WE WANT?
WHAT WE NEED?
WHEN WE WANT?
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8. PLAN
PLAN = RESEARCH x
TIMELINE / PROCESS
more simple what
comes first, second
and so on…
answers...
answers...
answers...
03 a
b
c
FIRST?
SECOND?
THIRD?
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9. PROCESS
PLAN divided by small
steps of documented
actions = PROCESS
WHO will do what
WHAT
at what TIME
what PLACE
with who’s HELP
HOW &
what is NEEDED
presented by VISHAL DESAI ~ +971 55 389 8410
answers...
answers...
answers...
04 a
b
c
INTERNAL
EXTERNAL
WHO WILL DO WHAT?
10. PROPERTY MANAGEMENT
As in particular we will discuss few of basic/unchangable steps of
PROPERTY MANAGEMENT here, addition/idea are always welcomed!
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SPOTTING
ASSOCIATE/RAPPORT
FEASIBILITY STUDY
MARKET WATCH
OFFERING
NEGOTIATION
CLOSURE
SPEP 1:
SPEP 2:
SPEP 3:
SPEP 4:
SPEP 5:
SPEP 6:
SPEP 7:
11. HISTORICAL INFOGRAPH
To understand the current situation, let’s have a look at past 15 years of infographic
of Property Market, Laws, and Trends & Buyers Reactions.
INFLATING BALLOON
The new law implemented by Dubai Government of FREEHOLD & LEASEHOLD, whereas
foreign national can own property in Dubai, created a high demands for property in Dubai,
which motivated Sellers & Buyers equally, many developers launched new projects, which
attracted massive buyers and moreover this even motivated buyers to go further and book
off-plan properties.
As this rush was not channelized, many developers didn’t kept the promises they made and
didn’t delivered projects on time, which effected the supply of units in market and effected
the prices of available units, both sale & rentals.
Speculation inflated the expectation of Sellers & Buyers, all this rise in market was happening
till the 2008 recession, where the seats were packed full in Property Market
DEFLATING BALLOON
There not being enough laws controlling & supporting the Freehold & Leasehold, UAE
Market was hit by recession, as most of the deals & promise were going haywire, all areas of
economy were badly hit, banking, share & capital market, jobs, immigration, airlines and
more important confidence of international investors & IFI
Rental & Sales scale also dropped, many expats started occupying affordable units in
Dubai market, because of which RERA got too active in brought in few laws & correction in
all area of Property Market, market conditions which were post 2002, reached the same
level or can say little better than that.
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12. HISTORICAL INFOGRAPH
...continued
ROLLING OF BALLON
As RERA initiated and implemented new laws, regulations, decrees, which even Dubai
Government supported by launching new infrastructure projects, amusement parks, tourist
attractions, supply in hotel rooms, motivated banks started supporting Dubai Government
intension, which was accepted by masses and the balloon start to roll in a stable manner.
Year 2013 was an exceptional for Dubai and will be recorded in history, Dubai win the bid for
EXPO 2020, which gave a new life to Dubai economy.
After winning the bid for EXPO 2020, international investors start to see Dubai as safe haven
for their investment, willing to migrate to Dubai, those developer who were yet not sure
about their ROI start to launch new projects around the expo site, banks opened their arms
with regards to mortgages, RERA made buyers money more safer & mediated the deals
between developers & investor by implementing new law of ESCROW ACCOUNT
YEAR 2016
You can say this, year 2016 was more dedicated to infrastructure & tourism, Dubai
Government was more inclined towards delivery & initiation of infrastructure, many
amusements parks open their gates in 2016. Palm Deira start to see some movement, EXPO
2020 site layout was planned.
Dubai Government was pumping the best efforts to make Dubai an investment hub. Though
things were not moving quickly but a blueprint was being designed to follow, which will
keep investor on a safer side and not lose interest in Dubai market.
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13. 2016 delivered... 2017 expected...
8,000 - 9,000
Apartments
30,000 - 32,000
Apartments
4,000 - 5,000
Villas
11,000 - 12,000
Villas
3,500,000 - 4,000,000
sq.ft. Office Space
(BUA)
3,500,000 - 3,800,000
sq.ft. Office Space
(BUA)
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INVENTORY
Let’s have a look at what we have on shelfs, divided into past
year deliveries and present year, sources of this data are
taken from online news organizations published articles on
different occasions & dates or from archives, like Gulf News,
Emirates 24/7, The National, MSN News, Arabian Business,
Gulf Business, Reidin, MEED, Property Forum, ME Construction
News, International Property Show, Property Week, Etc.
There has always been 20 – 35% under delivery of projects,
which were promised on a certain date, reason being
stringent laws & rules with regards to civil defense & fire safety
commissioning, which was for safety of tenants/owners
occupying the units, this was praised by all organizations
involved in delivering the property.
16. 2 6 0
2 5 0
2 4 0
2 3 0
2 2 0
2 1 0
2 0 0
1 9 0
1 8 0
1 7 0
1 6 0
1 5 0
1 4 0
1 3 0
1 2 0
1 1 0
1 0 0
9 0
8 0
7 0
6 0
5 0
4 0
3 0
2 0
1 0
0
2008 2009 2010 2011 2012 2013 2014 2015 2016
RENTAL
TRENDS
2008 - 2016
What the economy was
going through was putting a
lot pressure on job cuts and
shuffling lots of tenants from
Tier 1 & 2 to Tier 3, if we
observe there was a declined
in rents in all three tiers but
prices in Tier 3 was
comparatively less effected
than the other two, which was
notable by everyone, so
recently developers adopted
new strategy of affordable
housing, which will be
supplied to Tier 3 category.
TIER 3 RENTALS:
Old Town, Below Mid-range, Internal & Remote Area
(average/variation applicable between 5,000 – 10,000
subject to size, facilities, accessibility, view)
85 - 95
45 - 55
35 - 45
30 - 40
35 - 45
60 - 70
65 - 75 65 - 75
55 - 65
120 - 130
65 - 75 50 - 60
40 - 50
50 - 60
80 - 90
85 - 95
90 - 100
85 - 90
160 - 170
80 - 90
75 - 85 70 - 80
80 - 90
120 - 130 120 - 130 115 - 125
110 - 120
1000’s YEARS
BEDROOM ONE TWO THREE
85 - 95
45 - 55
65 - 75
35 - 45
35 - 45
60 - 70
65 - 7565 - 7565 - 75 65 - 75
120 - 130
65 - 75 50 - 6050 - 60
40 - 50
50 - 60
40 - 50
50 - 60
80 - 9080 - 9080 - 90
85 - 95
90 - 10090 - 100
85 - 90
90 - 100
160 - 170
80 - 90
75 - 8575 - 85 70 - 8075 - 85 70 - 80
80 - 9080 - 90
120 - 130
80 - 90
120 - 130 120 - 130120 - 130 115 - 125
110 - 120
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17. UNIT
COUNT
MINIMUM RENT
PER UNIT
MAXIMUM RENT
PER UNIT
MINIMUM RENT
ALL UNIT
MAXIMUM RENT
ALL UNIT
1 BEDROOM 90 65,000 68,000 5,850,000 6,120,000
2 BEDROOM 6 75,000 78,000 450,000 468,000
TOTAL UNITS 96 6,300,000 6,588,000
315,000 329,400
6,615,000 6,917,400
252,000 263,520
126,000 131,760
63,000 65,880
94,500 98,820
535,500 559,980
8.10% 8.10%
5,800,000 6,000,000
87.68% 86.74%
279,500 357,420
4.23% 5.17%
BARSHA
PROFIT %
TOTAL OUTWARD %
TOTAL INWARD % TO LANDLORD
PROFIT
TOTAL RENT
TOTAL OUTWARD
PAYOUT [ 2.5 % ]
VACANCY LOSS [ 1 % ]
BAD DEBTS [ 1.5 % ]
TOTAL INWARD
EXPENSES [ 4 % ]
TO LANDLORD
COMMISSION [ 5 % ]
19. JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR
MTH 1 MTH 2 MTH 3 MTH 4 MTH 5 MTH 6 MTH 7 MTH 8 MTH 9 MTH 10 MTH 11 MTH 12 MTH 13 MTH 14 MTH 15
264,603
3rd CHEQUE
1,450,000
1st CHEQUE
125,000 125,000 125,000
704,603
FUNDS AVAILABLE
829,603
FUNDS AVAILABLE
1,450,000 1,450,000 1,450,000 1,450,000
TOTAL RENT COLLECTION - 6,300,000 RENT TO LANDLORD - 5,800,000
PROFIT
1,450,000
3rd CHEQUE
0
GRC PRD INCOME
0
SECURITY DEPOSIT
0
GRC PRD INCOME
0
SECURITY DEPOSIT
348,000
EXPENSES
1,450,000
2nd CHEQUE
1,450,000
0
GRC PRD INCOME
315,000
315,000
SECURITY DEPOSIT
172,603
COMMISSION
GRC PRD INCOME
EXPENSES 4% LL RENT - 252,000
1,575,000
TENANT RENTS
1,575,000
TENANT RENTS
1,575,000
TENANT RENTS
1,575,000
TENANT RENTS
0
SECURITY DEPOSIT
PROFIT PROFIT PROFIT
0
COMMISSION
0
EXPENSES
0
COMMISSION
0
EXPENSES
0
COMMISSION
0
EXPENSES
1
PROPERTY
10
PROPERTY
2,646,027 3,896,027 5,146,02710 X
PROFIT
639,603
PROPERTY MANAGEMENT OUTRIGHT MODEL
264,603
FUNDS AVAILABLE
IF
SECURITY
DEPOSIT IS
IN
CHEQUE
FORMAT
389,603
FUNDS AVAILABLE
514,603
FUNDS AVAILABLE
639,603
FUNDS AVAILABLE
GRACE PERIOD
END OF YEAR 1
954,603
FUNDS AVAILABLE
579,603
FUNDS AVAILABLE
30
PROPERTY
30 X 7,938,082 11,688,082 15,438,082
END OF YEAR 2
20
PROPERTY
20 X 5,292,055 7,792,055 10,292,055 12,792,055
END OF YEAR 3
FUNDS AVAILABLE FUNDS AVAILABLE FUNDS AVAILABLE FUNDS AVAILABLE
6,396,027
FUNDS AVAILABLE FUNDS AVAILABLE FUNDS AVAILABLE FUNDS AVAILABLE
19,188,082
END OF YEAR 4
FUNDS AVAILABLE FUNDS AVAILABLE FUNDS AVAILABLE FUNDS AVAILABLE
22. 21 PRJ
YEAR 1 YEAR 4
AED 500,000 AS NET PROFIT PER PROJECT
TOTAL ONE TIME COMMISSION
9,765,000
SUM OF COMMISSION & PROFIT
COLLECTION FROM DIFFERENCE BETWEEN ACTUAL & PAID RENT
TOTAL PROJECTS
31
ONE TIME COMMISSION
315,000
32,000,000
31 PRJ
500,000 5,500,000 10,500,000 15,500,000
1 PRJ
YEAR 2
11 PRJ
YEAR 3
41,765,000
23. YEAR 1 YEAR 2 YEAR 3 YEAR 4
AED 150,000 AS NET PROFIT PER PROJECT
1 PRJ 11 PRJ 21 PRJ 31 PRJ
150,000 1,650,000 3,150,000 4,650,000
150,000
TOTAL ONE TIME COMMISSION
4,650,000
SUM OF COMMISSION & PROFIT
14,250,000
9,600,000
COLLECTION FROM DIFFERENCE BETWEEN ACTUAL & PAID RENT
TOTAL PROJECTS
31
ONE TIME COMMISSION
24. OVERVIEW
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It seems that market is slopping downwards
but it is not a right time to make a conclusion
yet, what numbers & speculation narrates is
2016 was better than 2017, we just finished the
first quarter in which rents showed a 1 – 1.5%
declined. Reasons being many to name few,
new supply, overall drop of market, landlords
fear, there are cases where landlords are
being generous to renew contracts for 3
months also if tenants have a job loss, on the
other hand landlords also fear to keep their
apartments vacant for months.
It must not be ignored that EXPO 2020 is
aiming to create a lot of movement in all
markets, from Retails to F&B, Aviation to
Tourism, Rents to Sales of property which will
need more manpower to serve all industry,
that’s what the economy needs a massive
JOB MARKET.
25. THANK YOU!
We need to see a big picture,
there is a stable growth
expected in UAE & GCC
Market. Government reforms
are doing great job to make
UAE market Safe & Stable,
which we will see in coming
years.
VISHAL DESAI
+971 55 38 98 410
yash422.vd@gmail.com
www.linkedin.com/in/vishal-desai