00:00You have, I guess you take the award for being the best performing stock on the Dubai Stock Exchange last year with a performance of more than 100 percent and 2024 more than 40 percent.
00:12What do you think is driving this re-rating of the stock?
00:16Well, first of all, thank you for the nice introduction and for hosting me on the show.
00:20I think these are the results of four years of hard work, turning the company out, restructuring the capital of the company, restructuring the operations and working hard to gain the trust of investors into our stock.
00:41Yeah. And of course, this is a company that's been around for a long time.
00:45It's been listed since 2008 and has lived through the booms and the busts of the Dubai real estate cycle.
00:52Is there any nervousness that this multiple year of boom could come to an end?
01:02Actually, the company has been listed for more than 30 years since 1993.
01:07And we've seen many cycles and lived through many cycles.
01:12I think this cycle is a bit different.
01:15In the sense that the Dubai market and the UAE market in general has matured significantly.
01:22Today, the demand comes from all over the world.
01:26It comes on the foundation set of making Dubai and UAE a country that offers a high level of lifestyle,
01:36be it through economic growth or through safety, through the different amenities and lifestyles offered by the city.
01:48It's become a destination for a lot of people from all over the world to come and live and work and make a life for themselves.
01:56Yeah. And you walk through Dubai and one thing that strikes you is just there's still ongoing so much production,
02:06so much development going on in the property space.
02:09And some analysts have started to warn about the potential for oversupply.
02:12Can you walk us through your own project pipeline and how you see the demand, the future demand being readily able to absorb all of the supply that's about to hit?
02:23So, as in the properties, we've already launched around 4 billion dirhams worth of projects.
02:29And we have another 2 billion in design stage in the making to be launched this year as well.
02:38We see the demand as being solid.
02:41And I think the years ahead, the challenge will not come from demand, but will come from supply chain management.
02:49We've seen some inflation in the cost of construction.
02:54And I think the challenge forward is to manage costs and manage supply chain to be able to deliver on quality and value to our clients and real estate investors.
03:09And at the same time, deliver profitability for our shareholders.
03:15When you think about prices right now, they're up, say, more than 70 percent since 2019.
03:22Would you say that valuations are looking a little bit stretched right now in Dubai real estate?
03:28I won't say so.
03:30So, at this time, if you look at the cost of land, cost of construction, selling prices is not that high.
03:40I mean, the margins made by developers are not so huge, are not abnormal.
03:47They are still healthy margins.
03:48But at the current selling price, I don't think there is room for it to go lower without really affecting the supply coming to the market.
04:00I think the market is going to regulate itself over the coming two years just by the inflation and construction costs and inflation in land value experience.
04:13So, this should be good for investors because as supply comes down a bit, it will regulate the demand.
04:25And where do you see the biggest opportunities that surround up the discussion?
04:28Is it in the luxury high end or in the more affordable sort of mass market units right now?
04:33I think there are opportunities across the board at the moment.
04:42Today, I think the opportunity lies on where a developer can get land because, again, the market has matured.
04:53Land availability in premium locations has become a bit limited.
04:59But there is also plenty of land on the outskirts and new areas like Dubai South.
05:07But, again, we think today of the opportunities not just as residential.
05:17There are industrial, there are opportunities in the industrial sector and opportunities in the commercial sector as well and the hospitality.
05:25So, again, we think that it is a good opportunity to improve.
05:27Yeah.
05:29Amal Khan Sahib, so good to talk to you.
05:31Thank you so much for coming on the show.
05:32Union Property CEO.
05:34And you take a look at the stock that was the best performing stock on the Dubai Exchange last year, up more than 106 percent, walking us through his outlook for this year.
05:42Yes, let's do it.
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