Developer says results show that Dubai's real estate market still lucrative

In Omniyat Properties' maiden project One Business Bay, IIB after accepting an offer from the Dubai-based property developer to make an early investment exit, in what Omniyat said was proof that Dubai's property market was still healthy and as lucrative as ever.

The International Investment Bank (IIB) and Omniyat Properties the property development arm of Omniyat Holdings, announced today that they have concluded an agreement under which the up and coming property developer bought back the 50% stake which IIB took in its debut project, One Business Bay, in December 2005.

The deal came after Omniyat Properties put together an early exit strategy and presented it to the bank. The strategy allowed IIB to make a staggering 114% return on its investment, and cash out more than 18 months ahead of schedule. it was adopted by the bank after it was approved by the Board of Directors.

Just over a year ago, and two months before Omniyat's official launch, the bank had paid an undisclosed amount for a 50% stake in the AED 507 million 30-storey commercial tower located at the entrance of Dubai's Business Bay commercial district on Sheikh Zayed Road.

"Today, we are reaping the rewards of our decision to invest in Omniyat Properties, and it proved that our faith in this young but dynamic company was well placed. IIB is very selective about its investments and from the moment we heard about Omniyat we knew that it was the right partner for us" said IIB Chairman Saeed Abdul Jalil Al Fahim.

One Business Bay was completely sold out less than three months after its launch in February of last year. Many of the investors who were among the first to buy offices in the tower have already sold their properties and made between 100 and 200 per cent return on their investment as premiums for offices in the unique tower have reached almost 40%.

Mehdi Amjad, President and CEO of Omniyat Properties, said the impressive financial results achieved by IIB as well as the individual investors who bought office space and retail space in One Business Bay demonstrate that investment in Dubai's real estate sector is still as lucrative as ever

"We believe this agreement which guaranteed a 114% return on the investment to IIB reinforces that our investors have made the right decision by believing in Omniyat properties. It demonstrates the excellent returns that investors can still make in Dubai's booming real estate market, provided they choose the right partner and a reputable developer like Omniyat," Amjad said.

He noted that Omniyat Properties is a firm believer in the Dubai market and is looking at taking the value of its investments from the current AED 6 billion to AED 10 billion by the end of this year. "We are strongly behind Dubai and we still see a lot of opportunities, as His Highness Sheikh Mohammed Bin Rashid Al Maktoum has repeatedly said," Amjad added.

Amjad pointed out that the company decided to offer the early investment exit option to IIB because it wanted to retain 100 per cent responsibility for the project and also because it wants to start a new trend in the market where it acts not only as a magnet for investors but also as a caring partner and strategic adviser for all its investors.

Amjad added that the relationship with IIB was not only successful financially for both parties, but also structurally in terms of the business model that Omniyat created, which we believe is a very good model for property developers in the region. We believe we created an ideal model of corporate governance between us and our strategic partners," he added.

IIB has 43 shareholders from around the Gulf including Al Fahim Group and Al Rostamani Group from the UAE, Bugshan Group and Al Rashed Group from Saudi Arabia, Al Ghanim Group and Al Wazan Group from Kuwait, and Doha Bank of Qatar.

"After only a year, the return on investment has been remarkable, and we were able to provide the IIB investors with exceptional returns. We were all very optimistic about this investment, but we did not expect this amazing success," said Aabed Al Zeera, CEO of IIB.

IIB had bought the stake in One Business Bay from Omniyat Properties and offered it in a private placement to its investors, When the investment was announced at a press conference in December 2005, IIB had forecast an Internal Rate of Return above 25% per annum, whereas Omniyat allowed it to achieve four times this figure in less than half the time.

"IIB's strategy is to offer investors a range of Shari'ah-compliant investments that are diversified by asset class and location, with a portion of this investment being placed with investors in GCC countries. We at IIB strongly believe that Omniyat Properties delivers a sound investment opportunity for our investors and shareholders alike.

"The bank targets market segments where there is still growth, and assets that are income-generating to ensure liquidity for investors. These factors are present in the One Business Bay project. The project's feasibility study was reviewed and the potential for success is threefold due to its position in Dubai's Business Bay, futuristic design and high-tech features," said Al Zeera.

One Business Bay is on track to be completed on schedule by the second quarter of 2008. The technologically advanced tower combines a sophisticated design with state-of-the-art infrastructure and sitting on plot one of the Business Bay district it is poised to be one of Dubai's most prestigious business addresses.