Owners of $4bn Dubai Sports City in expansion mode
Face to Face: Vijay Sajjanhar, Dubai Sports City
Dubai Sports City (DSC), launched a decade ago by three Emirati investors, proudly bills itself as the world’s first integrated sports city. Nestled in Dubailand, it is now home to major sporting events and between 10,000-12,000 residents.
We know about the international cricket stadium hosting top-class fixtures, the golf course designed by South African legend Ernie Els and about the schools and sports academies. But the current focus is firmly on developing the retail side of the 50mn ft² site now that the measures put in place to ensure delivery of residential plots in the wake of the 2008 financial crisis have been delivered, according to chief financial officer Vijay Sajjanhar.
“When the downturn happened, the focus of the company was to consolidate and deliver on what we had because we wanted to support the guys who had been associated with us,” said DSC’s affable Indian finance head. “A lot of them have come back over the last year and renegotiated and started off their construction.”
The first residential buildings handed over were Diamond Tower and Victory Heights. The latter is a gated premium golf course community developed by a joint venture between DSC and Arcapita Bank.
Most of the rest of the buildings have been started by third-party developers. Sajjanhar said there are more than 100 mixed-use towers already launched within the area (roughly more than 65% of DSC’s total residential capacity), with about 80 of these built by third-party developers.
Developers typically have between 36-48 months to complete projects once they’ve signed the sales and purchase agreement for the land plot.
“I think roughly 25 towers have already been handed over,” said Sajjanhar.
“Between now and the end of next year another 20 towers will be handed over by private developers. The 80 or so they are handling will be handed over on a staggered basis by 2016/2017.
“But now as the population has grown and the number of visitors has grown it’s very important for us to have the right kind of mix within the community,” he added. “That’s the reason why we started focusing on retail.”
This has led to a concerted push to develop the conjoined Canal Promenade and the Canal Residence West project located on the east side of DSC. At the former, a 1.5km pedestrian walkway running alongside a 1.2km man-made canal (as yet unfilled) is to be completed in the next 12 months, while fit-outs for four retail spaces are underway.
Sajjanhar said the walkway is an essential part of the area as it provides a scenic link between the city’s north hub and the south hub, where the former will have two retail levels (250,000 ft²) around the canal, plus offices and residential above, and the latter will contain various entertainment facilities.
He said: “This is an area which is slap bang in the heart of the community. The entire Canal Promenade is retained by Dubai Sports City.
“You’ve got a canal, cafés, restaurants, people coming down to relax. There will be activities all year round regardless of the weather. The focus has shifted to start completing that stretch.”
The north hub is earmarked for commercial launch around the last quarter of this year and the south hub will follow thereafter. However, both are expected to be completed within three years from the date they are publicised.
“All the financial closures have happened on the north hub; the final designs and drawings have been done. Hopefully ,by the end of Q3, early Q4 of the year, we will have an announcement on the north hub,” said Sajjanhar.
Running parallel to the north hub and canal walkway, construction has started on two residential towers containing a small retail offering that will form the second and final phase at Canal Residence West. The first phase involved the construction of three buildings that began handover in October last year, with the final structure expected to be awarded a building completion certificate by November. The retail element for phase one, containing around 25,000ft², will be ready by the end of 2014.
“We’ve already completed construction of the ground level of the two buildings in phase two,” added Sajjanhar.
“We will commercially launch them around Cityscape Dubai right off the back of the success of phase one. Sub-developers normally sell at AED900-950 per square foot but all Dubai Sports City-developed property sell at AED1,100-1,200 per square foot as these are prime real estate plots.”
Sajjanhar said the east side of the canal – Canal Residence East – would be developed at the same time as the south hub in 2016 and mirror Canal Residence West.
“We don’t want to follow the herd and say everything is going into the market at the same point,” he said. “We want to make sure that we develop the community in a controlled and measured manner.”
Elsewhere, designs for the Arena Mall, to be located between the cricket stadium and the indoor stadium, have been finalised by a US-based firm. The mall is on the future agenda of Dubai Sports City.
“The mall is around the same size as the Mall of the Emirates [in Dubai], around 1.4mn ft² of leasable space,” said Sajjanhur.
“The mall has been configured in a way so people come to the events via the building.”
The Victory Heights community is being extended by an extra 100 units to 1,062, but Sajjanhar said this figure is actually small as DSC is strict about limiting development around the golf course. At the same time, a pair of third-party developers are adding another 100 villas outside of what’s happening at Victory Heights.
“The unique selling point of the product is that if you look across the 18-hole golf course it is rare that you will find a golf course villa project with just 1,000 villas,” said Sajjanhar. He said 70% of DSC’s phase one villas attract a premium as they face the golf course.
“So between the north hub, the extension of Victory Heights and Canal Residence West, all of which are our own developments, we will be launching around 1.5-2mn ft² of high quality real estate in the next six to nine months.”
By September 2015, an additional two schools will be added to the existing three.
Meanwhile, infrastructure work in and around DSC has reached 97% completion.
“The only thing is the top layer of road and landscaping which will be done when construction picks up,” said Sajjanhar.
He added that residential plots close to Sheikh Mohammed Bin Zayed Road that overlook the golf course could be released in the near future.
“Those are not going to disturb anyone in terms of construction as they are out of the way so there is no time pressure to release them,” he said. “The plan is to develop them ourselves but we are open to third-party developers.”
At the current rate DSC may be built out by 2020, said Sajjanhar.
“We are in the process of building an iconic destination which promotes a unique lifestyle with sport as the unifying theme,” he added. “We will take our time with this development and ensure it is delivered in the right way.”