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Ayman Okasha, a keynote speaker at the marcus evans Infrastructure & Property Development MEA Summit 2014, gives advice on achieving excellence when reviving frozen projects.
Interview with: Ayman Okasha, GM Rental & Mirdiff, Union Properties
As infrastructure and property developers in the Middle East start reviving projects that were put on hold, there are a few things that they need to do differently, according to Ayman Okasha, GM Rental & Mirdiff, Union Properties. “The more time, effort and money developers spend before developing to get the product right, the more likely it will be received well, which will minimise any future bubble or shortfall in the market from a demand or financial point of view,” he said.
Okasha is a keynote speaker at the marcus evans Infrastructure & Property Development MEA Summit 2014.
Many developers are now reviving frozen projects. How can they achieve project excellence this second time around? What lessons should they have learnt?
At present, companies/developers should be extra careful by developing projects that can be absorbed/accepted by the market, based on genuine foundations and market conditions, mainly supply and demand, proper feasibility studies and risk analyses, complementing the existing products and services that are being offered in the market.
When the market was booming several years ago, developers did not carry enough studies and financial risk analyses to support the viability and the financial health of the projects, as the sale transactions were not meant to be utilised by end users. The key issues related to the investment decision, such as the location, project details and type, were not considered as the investor knew that he was doing the transaction to benefit from the difference of buying vs. selling and as a tool of speculation, rather than being a genuine buyer or end user.
Project excellence can be achieved by gathering all the information related to the freeze percentage of work achieved on the project since the stoppage time, providing a comprehensive list of the remaining works and looking at it thoroughly in order to obtain an alternative course of plan and action to change either the concept or the finishing items, as to be more flexible in terms of time, cost and work progress and achieve a smooth completion for a project that is compatible with the current market and requirements.
How deep do developers need to go in the market research to support a development?
In general, the deeper developers go into the details of a planned development, the more the unsuccessful results they will eliminate, as the end product will meet stakeholder and end user demands. To use a residential building development as an example, a pre-development market research should be conducted with details covering the following areas: the location of the residential building, ensuring that the building details including its units match the level of target customers, in term of details and quality for that location; the size of units in square feet; the percentage of number of bedrooms in each unit to the overall number of units i.e. number of bedrooms in each unit to the overall number of units; i.e. 30 per cent one bedroom, 25 per cent with two bedrooms and 45 per cent with three bedrooms; type of apartment: open, closed kitchen, balcony, number of toilets in each unit; the amenities and services in the building; and style and class of finishes.
What are the main challenges that developers could face in reviving a frozen project?
They could face: financial challenges, time factor with all its related issues, social challenges, logistical challenges, administrative challenges, market changes, changes in customer trends, and changes in municipal rules and regulations.
Which specific markets or sectors would you point developers and investors to? What are the hidden opportunities in the Middle East?
Due to recent developments with Dubai winning the hosting of EXPO 2020, the organic growth of the city and it being the most preferred city to visit in the region, the following sectors have great opportunities for investors: services, retail, hospitality (3 & 4 star hotels), real estate supported by proper research and development, transportation, health and education.
Interview by: Sarin Kouyoumdjian-Gurunlian, Press Manager
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