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ONE of the kingdom's leading property professionals is calling on developers to keep their nerve in the face of the current economic downturn and not damage their own investments by cutting prices. Neil D'Silva set up Norwich International Consultants (NIC) in 1997 and was initially involved in real estate marketing for projects such as Al Marsa Floating City. More recently NIC has moved behind the scenes carrying out research and development for developers and taking on design and build development projects with joint partners around the world. Here he writes for GulfWeekly about what he calls 'brand damage'.
I have been in Bahrain 18 years and have had 10 good years in the business of real estate and it has always been important for me to set clear fundamentals before approaching the next stage of my progression in the industry.
My experience in working with developers, architects and engineers has been priceless and Bahrain has proudly come a long way to achieve its modern status in the international commerce arena.
The words 'reduced price' are something I thought would never appear in this industry among agents and developers.
I have said many times that the success of a development is in the hands of its promoter and the architect. It is they who create 'locations'.
A site can be geographically accepted as fine for developments but there are 'dreamers', and those who enable you to walk the dream from pre-sale to post-construction.
How can developers expect to create confidence in the eyes of end-users and investors when the strategy is to reduce the price and exit the development at the earliest opportunity?
In some cases, developers may need to slow down on forecasted release dates. Once units are released, it is not the correct practice to take them back to be sold at a lower prices. I call that 'brand damage'.
It will be a rough road ahead and all that is needed is for developers to slow down and concentrate on avenues which could add value to a development. In return end-users will be happy for developers to spend time in protecting the interest of those who are already on board.
The luxury end is about quality and not quantity.
What is required in any market today is entrepreneurship with an almost psychic ability to adapt to great business modules.
There will be a lot of room for new ventures in the next six months to benefit from long term security and profits.
Over $900 billion was pulled out of the market which is waiting to be invested.
'Emerging market' is a term used by the developed world to describe Asia. Features of such a market include growth potential; manpower; government or political support; economic development; adaptation; culture and history.
Listed properties in Dubai recently grew by 75 per cent but more than 40 per cent of Dubai's projects are on ice. These include, but are not limited to, the Triumph Towers, The World or the Universe etc. This has increased the budget for Asia-based real estate developments from Dhs49 billion (BD4.9bn) to Dhs595 billion (BD59.5bn).
But there won't be a future if we don't prepare for sustainable growth. We all feel the economic crunch and it is important to concentrate and strengthen internal trading. Those countries with strong internal trading are less affected by the crunch and have shown positive growth along with reducing inflation levels.
Sustainability has a major role in socio-economic factors. I know this through my own experience. I took a step in the third quarter of 2008 to delay one of our developments in Sri Lanka by 12 months. My sales campaign for the luxury integrated resort was to kick start in January; instead, I appointed one of the best environmental consultants in Asia to carry out an Environmental Impact Assessment (EIA) which is earmarked to be completed in February.
This strategy has boosted interest from various organisations and individual investors.
I intend to share the final EIA with the public through my development website www.dutchbayresorts.com. The EIA will be followed by a green audit to the final design and environmental control and management planning both during, and post, construction, lessening my carbon footprint as a developer.
Developers must bank on their development's fundamentals and hold on to the brands they create. The investor will recognise those which are niche. Developers must also be prepared to adapt to new strategies. Clients are more cautious today than ever.
