What was the rationale for starting a real estate company? And how has LLJ Property evolved since its inception?
I have worked in real estate in Abu Dhabi since 1993. My partners in LLJ, Lubna and Jane, worked with me for an Abu Dhabi branch office of a Dubai-based company. We recognised the opportunities in Abu Dhabi and in 2005, felt it was the right time to launch a new company to serve the UAE Capitals’ real estate market. LLJ do a lot more than sell property. We work in project management, administrative support and consultancy for private and master developers. We also have a very active leasing team and are developing the property management side of the business.
With the recent global downturn, is LLJ Property concerned that the Abu Dhabi ‘dream’ is a ‘bubble’ waiting to burst?
I don’t consider Abu Dhabi a bubble that will burst at all. There are sound reasons for companies to be in Abu Dhabi, and they’re mainly long term. Just look at the diversification programme of the emirate. Projects like Khalifa Port, the biggest industrial project in the world, which will attract new industries in engineering, manufacturing and aviation. Tourism is another major investment area, with the expansion of Etihad Airways, the opening of new hotels and the development of the cultural district on Saadiyat which will be home to the Guggenheim and Louvre museums. These types of projects require highly skilled professionals and create long term employment in the city driving the future need for housing. With this level of diversification, Abu Dhabi’s growth is here to stay.
What do you think the rental trends will be for offices and homes this year?
We have yet to see any adjustment. However, there is a lot of commercial property due to complete in 2009, hopefully this will result in an easing off on commercial rents. Also, given some companies may slow down their planned expansion, this will ease the pressure on residential and office space so we are likely to see a dip in residential rates this year after rents doubled in 2008. However, Abu Dhabi won’t be seeing cheap rents. There is a significant gap between supply and demand – it’s even more expensive than Dubai. In Abu Dhabi, you’d be lucky to find a one bedroom apartment to rent for less than AED 180,000 today.
Are there still opportunities to make a ‘quick profit’ in the real estate market or is the market becoming more mature and settling down?
We’ve never believed that real estate is about a quick profit. As a business we are not focused purely on short term gains, we take a longer term view and are building a company that will grow with the market and hopefully weather the storms. We believe that property is a medium to long term investment. Investors should buy property based on this principle and their
potential to earn good rental yields as well as capital gains. The Abu Dhabi market is maturing and we welcome the seasoned investors who recognise the excellent opportunities for good returns from property investment.
What confidence-boosting measures can be introduced into the market to make the secondary market more active and more transparent?
Just general awareness. For example, there is a perceived belief that mortgages are not easy to come by. That is not true. A number of banks are offering 80 to 90% LTV on purchase price of Abu Dhabi property. Banks are still lending money, but today they’re marketing to the right buyer.
What are the most attractive developments to invest in? Why?
There are viable opportunitiesin both the commercial and residential markets, as long as you’re buying from reputed developers with an existing track record. My personal favourite is Reem Island. Aside from all its great amenities, it is located near the central business district with easy access to the airport, the cultural district on Saadiyat Island and the main attractions of the city.
Does LLJ Property have plans to expand its services and/or diversify into related activities?
We are establishing a valuations department and, as more real estate projects near completion creating more landlords, we are developing our individual unit property management team. These will work hand in hand with our already established leasing team to offer both individual and corporate investors a full tenant finding and management service for their property portfolios.
In what specific ways is LLJ Property involved in setting new standards in real estate services?Is it time for realtors to unite to benefit the industry and standardise procedures, or is it still a case of lone operators doing their ‘own thing’?
LLJ is very much a people business. We focus on client service. We are not claiming to be a company that does everything – our focus is on our clients and their needs. I’m definitely in favour of realtors coming together and regulating the industry. Evolving accepted practices is essential. There are rogue brokers that create a bad taste in the market. We don’t want that type of negativity in the industry. More established companies must pull together to provide good, honest and ethical service.
What effect will the increasing supply of property in Abu Dhabi have on prices and overall environmental sustainability?
Prices are basically determined by supply and demand. As long as there is demand, prices will increase. However because of
the current market correction, prices will move more slowly than before. In terms of environmental sustainability, Abu Dhabi is working particularly hard on this. The Abu Dhabi Plan 2030 is focused on helping the emirate grow in a sustainable manner. The evolution of a zero carbon city beingdeveloped by Masdar, is another initiative being taken in Abu Dhabi that epitomises global sustainability objectives.