Dubai’s AHS Properties has acquired Shangri-La hotel on Sheikh Zayed Road in a deal valued at Dh1.1 billion ($272 million), and also plans to launch a Dh25 billion project this year, its chief executive has said.
The company bought the 42-floor Shangri-La property from Abu Dhabi-based Mismak, a unit of First Abu Dhabi Bank, Abbas Sajwani, who is also the founder of AHS, told The National.
“It was a very key trophy asset and the location is second to none,” said Mr Sajwani, who is the son of Damac Properties chairman Hussain Sajwani. “The whole idea was to acquire it and expand our footprint.”
Shangri-La covers an area of almost 93,000 square metres, and comprises a hotel, offices, residential units and food and beverage outlets. The company is yet to decide whether to refurbish the building or keep it as it is.
“The deal was funded through a mix of debt and equity,” Mr Sajwani said. He added that the company’s balance sheet is “solid” amid property sales in the last few years.
“In the five years since we’ve started, we have sold more than $2.5 billion of properties, and those properties are being handed over now. So we’ve done very well over the last five years, and we have a very solid balance sheet today,” he said.
Shangri-La is the second tower on Sheikh Zayed Road bought by AHS, after a $120 million deal to buy a commercial tower last year. That property was relaunched as AHS Tower this year, with the company generating more than $700 million in sales.
AHS is also planning to launch a Dh25 billion mixed-used development in the third quarter of this year. It will include offices, residential units and a hotel “in one of the biggest plots on Sheikh Zayed Road on the Dubai water canal”, Mr Sajwani said, without revealing further details.
With the launch of this project, the company’s property portfolio will grow to Dh50 billion, he added.
Dubai’s property market, which was booming at the start of the year, has largely weathered any immediate major fallout from the Iran war.
In the first quarter of this year, transactions hit Dh252 billion, a 31 per cent annual increase, the Dubai Media Office reported, quoting data from the Dubai Land Department. A total of 60,303 property transactions were signed, marking a 6 per cent year-on-year rise, the DLD said.
The Dubai government has also updated property visa rules to spur demand and attract overseas buyers.
Under the new rules, the minimum investment requirement of Dh750,000 to obtain a two-year residence visa for single owners has been removed. In the case of joint ownership, the minimum requirement has been reduced to Dh400,000 for each investor.
In April, Dubai property valuations recorded their second monthly decline, with villa values falling 1.7 per cent monthly, while apartment values dropped 2.2 per cent, the latest ValuStrat report shows.
Continued demand
The Dubai market will “continue to perform very well”, as the city offers a good lifestyle, strong banking system and infrastructure, and has a robust economy and liberal visa regime, Mr Sajwani said.
Residency permits for retired and remote workers and the expansion of the 10-year golden visa programme are among the reforms undertaken by the UAE government in the past few years to attract investors.
The company is continuing to see demand from clients “who believe in Dubai’s long-term vision”, Mr Sajwani said. “We sold an apartment of $30 million around one month ago, that shows the demand is continuing.”
Investor demand is coming from different places, including Europe, India, Russia and Far Eastern countries, he added.
However, he said there has been a “natural slowdown” in the property market amid the Iran conflict.
“There’s nothing to worry about and people are waiting for the issue to be resolved. We purchased the Shangri-La property for Dh1.1 billion 10 days ago – that shows confidence in the market.”
Abu Dhabi expansion
The company also plans to expand into Abu Dhabi, and is “looking for the right opportunity”, Mr Sajwani said, without providing further details.
Abu Dhabi has been attracting new developers, with Dubai’s Sobha Realty announcing a Dh40 billion residential project in Al Bahia this year. Egyptian billionaire Naguib Sawiris in April unveiled a Dh30 billion expansion of a “mini city” project between Abu Dhabi and Dubai.