Dubai developer Nakheel targets Chinese businessmen with Dragon Mart expansion

Born in Vienna and educated in India, Sanjay Manchanda is a fellow member of the Institute of Chartered Accountants of India. He joined Nakheel as a consultant to advise the company through its US$16 billion debt restructuring programme, which was successfully completed in August 2011. He assumed the role of chief executive in 2012. During his tenure, Nakheel delivered on its revised business plan two years ahead of time and repaid its bank debt of US$ 2.2 billion four years ahead of schedule. Prior to joining Nakheel, Manchanda spent 25 years working in the Middle East as a partner with global accounting advisory firm PricewaterhouseCoopers (PwC), where he was instrumental in concluding the financial restructuring of jewellery retailer Damas.

Can you tell us more about Nakheel and what kind of projects it has?

Nakheel is one of the world’s leading developers and a major contributor to realising the vision of Dubai for the 21st century – creating a world class destination for living, business and tourism. It continues to deliver and enhance an iconic portfolio of innovative landmark projects in Dubai across the residential, retail, hospitality and leisure sectors. Its master developments, including Palm Jumeirah, The World, Deira Islands and others, span more than 15,000 hectares and currently provide homes for more than 200,000 people. The developer has nearly 21,000 residential units under construction or in the pipelines. Dragon Mart [phase] one and two is part of its project portfolio of more than 15 million square feet of leasable space, and its growing hospitality project portfolio comprises 10 hotels at various locations in Dubai, including Palm Jumeirah, Deira Islands, Ibn Battuta Mall and Dragon City.

What made the firm decide to build Dragon Mart catering to Chinese businessmen?

Nobody can ignore the factor of China as it is a large economy. One of the main themes to promote Dragon Mart was to allow our neighbours to experience trading with Chinese companies.

Dragon Mart is the world’s biggest trading hub outside mainland China. What kind of visitors are interested in visiting the complex?

Chinese retailers or wholesalers are selling everything from garments and sanitary products to consumer goods. It not only attracts local businessmen from Dubai but also UAE countries, and even Africans come to do sourcing.

Do you have any investment figures from Hong Kong and other parts of Asia?

Investors from Hong Kong and other parts of the Far East and Southeast Asia have already bought around 500 villas, apartments and land plots from Nakheel. They are spending a combined HK$1.9 billion in the process.

Do you have a breakdown to show how many are Hong Kong investors and how many are mainland Chinese?

Chinese investors accounted for nearly 80 per cent of these purchases with 390 properties worth

HK$1.6 billion bought by them.

Who is Nakheel’s largest group of foreign property buyers?

The biggest group of overseas investors with Nakheel is Indians as they spent HK$19.5 billion to purchase 4,400 properties.

Will the slump of oil prices affect the property investment demand as fewer foreigners working there?

Oil accounts for less than 5 per cent of Dubai’s economy. Today, Dubai basically relies on tourism, trading and transportation. China was the largest trading partner with Dubai, with trade volume amounting to US$47 billion in 2014. We expect that will increase to beyond US$50 billion for 2015.

Do you see the Chinese investing in real in recent years?

Chinese investment in real estate recorded a year on year 300 per cent growth to US$350 million in 2014 from 2013.

What is the property market outlook for Dubai in terms of investment?

Dubai has set an objective achievement with certain milestone in the next five years. The government hopes to see a significant growth in tourism over the next five years. Today, the Dubai airport is considered one of the busiest in the world with 12.5 million tourist arrivals per year. But the government aims to increase that to 20 million by 2020. That means infrastructure needs to be upgraded and hotels need to be upgraded to achieve this goal.

How many Chinese tourists are visiting Dubai?

Chinese visitors have recorded a year on year 25 per cent increase to 344,000 in 2014 and 241,000 in the first half of 2015. China is now the eighth largest tourist market for Dubai.

What is the expatriate population in Dubai?

There are 4 million people in Dubai, and 80 per cent of them are expatriates. It creates a strong demand for leasing. Some of them will think of buying apartments in Dubai after working there for some years.

Will Dubai impose any tax on the resale of properties?

No. Investors will not be subjected to any taxes such as capital gain tax.