UAE-based IBC Group announced on Tuesday that it intends to acquire 10,000 premier properties in Dubai, to furnish and manage as holiday homes, and has contracted Berkshire Hathaway Home Services Gulf Properties (BHHS Real Estate Broker LLC Gulf Properties) on an exclusive basis to play an advisory brokerage role to assist in identifying, acquiring and financing the properties. The deal is valued at $5 billion (Dhs18 billion), with a possible scale up to acquiring 1 million properties in over 100 cities across the globe.
With the S&P Global Ratings forecasting growth in the real estate and hospitality sectors by 2020, this IBC Group venture comes at an opportune time. Operating in the UAE since 2014, the IBC Group has focused on private equity investment in real estate, arts and future technologies.
The group is backed by global banking and finance leader Khurram Shroff, who features in the prestigious list of the “Top100 Most Powerful and Influential Muslims in Great Britain and the World” by Power100. Shroff is also the co-founder of The Gallery Suites Vacation Rentals, a worldwide short-term rental management firm, which focuses on providing specialised services to property investors, homeowners, and Airbnb hosts.
With this strategic partnership with BHHS for leveraging their expertise, IBC Group aims to become a key influencer in building the confidence in the Real Estate industry across the Middle East.
The Global Muslim Travel Index 2016 features the UAE as one of the most favoured Muslim travel destinations and the alliance intends to address this segment of the market ably. The properties to be acquired will be financed via an Islamic Finance vehicle known as “Sukuk”, a Sharia-compliant bond, to the tune of $1 trillion. “We believe in interfaith harmony and cater to all beliefs,” says Khurram Shroff. “For the Muslim traveller, providing Sharia-compliant vacation homes with standardised Qibla direction and prayer mats in each of our apartments will enhance our offerings in this sector.”
An alliance of market leaders to secure the opportunities in Dubai’s holiday homes market. The IBC Group perceives strong opportunities for growth in the short-term accommodation market in Dubai, especially in light of the approaching Expo 2020 event. The government’s thrust on innovation and infrastructure development is positioning Dubai as a global centre for trade, logistics, tourism and finance. The largest ever event of its kind in the MEASA region, Dubai Expo 2020 is set to attract an anticipated 25 million visitors from all around the world. With an increase in the number of travellers looking at leasing furnished properties on short-term basis globally, a substantial segment of these visitors are expected to avail of this alternative.
Khurram Shroff believes that the venture brings together the finest in skills, experience and market acumen. “This partnership represents the coming together of organisations that each bring specific strengths to the table, which will ensure the delivery of the highest possible standards of services and facilities in the Dubai short term accommodation market”.
An ambitious foray that will redefine the short-term rental market in Dubai. As an initiative that leverages multiple emerging trends, from Dubai’s status as a destination for tourists and business travellers to the popularity of short-term rentals, the announcement will propel IBC Group to the forefront of a growing segment within the hospitality sector.
The short term prospects of the venture are particularly promising, in the light of Expo 2020. However, with the regulatory framework governing the Dubai business ecosystem becoming increasingly more lucrative for investors and corporations, the possibilities for medium and long-term growth also hold significant promise.
Acquisitions for the properties are already underway, with the first choice of location being Dubai Marina. “Dubai Marina is an extremely popular district of Dubai, and caters to a growing market of discerning travelers and visitors from Europe seeking high-quality, high-price locations at affordable rates. And it is this niche we will be catering to, providing affordable luxury for vacation homes in popular locations at an attractive price point”, adds Khurram
“Reports indicate that the GCC Hospitality market is expected to reach $32.5 billion in 2022 owning to major global events being held like the World Expo 2020 in Dubai, the FIFA World Cup etc. Additionally, infrastructure development, traveler-friendly visa regulations, and the digitisation of the industry, are all aimed at creating hassle-free travel experiences for tourists, which will further drive demand for quality short-term accommodation. We feel it’s the right time to cater to this growing demand for affordable luxury”, adds Khurram Shroff.
