Rob, what, in your opinion, is the current situation on the Dubai market?
Despite existing stereotypes, the recent instability in the region has only strengthened Dubai's status as a “safe haven” for international and regional investors, possibly the quietest in the Middle East. This refutes the point of view of some investors who thought Dubai was an inflating bubble that would burst soon. In fact, the market has proven that it has a solid foundation.
Looking at the Dubai property market at a macro level, from a global perspective, you can see the continued high demand for quality properties.
According to a July 2011 study by Jones Lang LaSalle, there are more buyers in Dubai than buyers in the Dubai market. Given the stable position of the country's national bank, whose reports showed 21.6% growth over the past year, as well as the status of “Best City in the Middle East in terms of quality of life”, according to Mercer, Dubai provides the highest level of comfort for investors, being international a center with a growing economy. The market is entering a stage of maturity, and in the medium and long term, investors will be able to experience the benefits of investments.
The current unstable situation in the Eurozone can certainly affect Dubai, by shortly reducing the return on investment, but in the long run it will not have a significant impact on the economy of Dubai, since most investors in the country are not from Europe, but represent the Gulf countries. Also, if we talk about investments in apart-hotels, the profitability of these investments is primarily associated with the growth of tourist flow and occupancy rates of Dubai hotels, which show stable growth.
At the micro level, looking in more detail at the situation inside the country, we continue to observe evidence of economic growth, backed up by the ambitious plans of the Dubai government, which suggest that the best is yet to come. According to the Capa Center for Aviation, Dubai International Airport will soon overtake London in terms of transit traffic. Researchers argue that, while maintaining the current growth rate, in 2012 Dubai will retain its position as the second largest aviation center, and by 2015 it will be ahead of London, since the airport of the British capital does not have "sufficient expansion opportunities." In addition, according to a recent study by STR Global, Dubai continues to occupy a leading position in the global hospitality industry.
Summarizing all of the above, I must say that there is a positive situation on the market for both city residents and investors.
Rob, let's take a closer look at the Dubai property market. Please tell us about new projects and price levels?
In the segment of apart-hotels, in which we offer such facilities as First Central, Metro Central and Grand Central, in 2011 1900 rooms appeared on the market, which ensured a market growth of 3%, moreover, almost all offers were in the four-star category . Also in the city there was an increase in RevPAR by 6%. It is expected that in 2012-2013 the supply of hotel rooms will increase by 9%. Speaking about the balance of supply and demand, it is worth noting that the flow of tourists in Dubai increased by 10% in 2010, and this trend is expected to continue. Thus, customers who purchase apartments within the hotels that The First Group erects are given the opportunity not only to secure a reliable investment, but also to profit from renting out hotel rooms to businessmen and tourists.
What projects are the most attractive today, and why?
Of greatest interest today are projects that have already been completed or are being completed, if we compare them with projects whose construction has just begun or is in the planning stage. Most of The First Group's facilities are either already built or are under construction.
What are the general trends of Russian investments in Dubai? Have new opportunities and formats for investment appeared for them?
Based on the consolidated data of developers, Russian citizens account for up to 25% of the total volume of real estate purchased in Dubai (including both private residential and commercial real estate). These statistics have a significant impact on the marketing activities of Dubai developers.
Companies that care about the future release their advertising materials simultaneously in English, Arabic and Russian. Many developers even open Russian restaurants at their facilities, focusing on the needs of buyers from Eastern Europe.
While investments in private residential real estate bring less dividends than expected, the format of investment in apartments within the hotel comes to the fore. Apart-hotels allow investors to invest in one of the most stable markets in the world. According to STR Global, in October 2011 Dubai showed the highest occupancy rate in the region: 85%, as well as an increase in RevPAR by 13.5%. In July 2011, in the midst of the Arab summer, the occupancy rate was 78%, which is 20% more than in 2009. In August, the market demand exceeded the 2010 figures by 16.5%.
Investments such as the purchase of rental apartments are becoming increasingly popular as they offer higher returns than bank deposits and are more reliable against the backdrop of volatile stock markets.
In addition to buying real estate, we are witnessing a growing volume of Russian investments in local business, from consulting to trade and freight transportation.
What is the current price situation, and what are the trends in investment?
According to independent experts, in May 2011 there was a stable situation with residential property prices in prestigious areas. As investors and developers gain confidence in the long-term sustainability of the Dubai market, we are witnessing further diversification of investment objects and an expansion of offers in the apart-hotels segment.
So, you should pay attention to The First Group's First Central Aparthotel, the iconic 29-story skyscraper located in the heart of the TECOM area.
Among the 524 luxury hotel-type apartments, you can choose one-bedroom rooms and luxurious studio rooms. This project represents an excellent opportunity to invest in the dynamically developing hotel industry of the emirate. He offers his guests the opportunity to feel the comfort of home, while using the services available only in the hotel.
First Central complex is the best choice for tourists and business people planning to rent a house for short-term medium-term rent. All apartments are turnkey with a full set of furniture and are equipped to the highest standards.
Speaking about investments in apart-hotels, it is important to note that this investment format provides an opportunity to profit from renting rooms for short and medium-term rent to business and private travelers.
Many analysts believe that the crisis demonstrated the "virtuality" of the Dubai real estate market and the lack of control over price increases, which resulted in a steep fall. What changes have been made as a result of the crisis?
Frankly, the crisis has benefited the market. Speculators are gone, and we can see the true picture of the stabilizing market in Dubai. Like any emerging market, we went through a phase where speculators set the tone for the market. Today we work with more reasonable investors who are interested in medium and long-term investments, rather than quick profit.
As a result, we have a more stable market, with mandatory deposits that protect the interests of investors, and selection criteria that ensure that the buyer is able to maintain ownership of the property after the project enters the market.
How do you assess the degree of interest of Russian investors in Dubai?
We are seeing significant interest from Russian investors regarding Dubai. This is confirmed by statistics on purchases made by Russian citizens. At The First Group, more than a quarter of investments in apart-hotels are made by Russian-speaking clients.
The highest demand from the residents of Russia is for top-class facilities with a full range of services offered by developers with a good reputation. The Russians prefer objects for the management of which they do not need to constantly travel to Dubai.
What is the volume of transactions concluded by Russian investors in the Dubai market?
There is no consolidated information on the volume of transactions in the UAE market, so it is very difficult to make estimates. We know that up to 25% of real estate is acquired by Russian investors.
Are there statistics on projects in Dubai implemented by Russian companies and / or projects implemented in Russia by companies from Dubai?
400 companies are registered in the Dubai Chamber of Commerce and Industry, among the owners of which there are Russian citizens. However, there are also companies that are not members of the CCI. Based on the data we have, we estimate the number of such companies in the region of 1000. In the UAE, projects are being implemented or representative offices are opened. 
several large Russian companies, including Gazprom, Lukoil, Rosneft and Itera.
What features does the Dubai market have?
The uniqueness of the Dubai market lies in the fact that, on the one hand, the country's economy is developing, and on the other hand, a luxurious lifestyle allows investors to regard Dubai as an equal player among the leading states of the world. Do not forget that the history of the country has only 40 years, and the market is still under development. Now is a very good time to buy real estate, just imagine what kind of return the investments made can give in 10-20 years, when the country's economy will become more developed.
And finally, how do you see the near future of The First Group?
Honestly, 2012 already promises to be very interesting for us, thanks to projects such as Metro Central and Grand Central in the TECOM area, which will be ready to meet their guests! In addition, we are working on another new project that will take its place of honor in our portfolio, and about which we will definitely talk about “Location, location and once again location”! Because life on the shores of a man-made harbor is what our customers have been expecting for a long time. We cannot yet reveal all the secrets, but readers of the Russian Emirates will be the first to whom we will give all the details!
