Face to face: Raj Sahni, RSG International
Raj Sahni details progress on RSG International’s three ongoing Dubai projects, and explains why his firm is only willing to develop properties when the figures make sense
Raj Sahni, owner and chairman of RSG International, has accepted that his days as an unassuming member of Dubai’s real estate community are behind him. He says he’s known this since October of last year, when he made headlines around the world.
Dressed in his trademark baseball cap and kandora, he tells Construction Week: “I was quiet in real estate. I was just buying and selling; nobody knew my name. Nobody knew about me, and I never wanted people to know about me. [At RSG,] we were – are – a quiet developer. We enjoy working quietly. I just became famous when I bought the number, and I’d already bought another number before that.”
He adds the last statement almost as an afterthought, sounding like he’s still puzzling over the attention he has received, and continues to receive, because of his interest in “numbers”.
But when those numbers add up to millions of dollars, public attention is bound to follow – something that he discovered when he bid a staggering $9m (AED33m) for the D5 number plate last year at an auction hosted by Dubai’s Roads and Transport Authority (RTA).
And, as he points out, this wasn’t his first foray into the world of licence plate auctions. At the time, he already owned several personalised registrations, including one that he purchased in 2015 for $6.7m (AED24.5m). Further stoking the public’s interest, Sahni paid $1.2m (AED4.5m) for a mobile phone number at a du auction in February 2017.
Despite the unwanted attention, Sahni says he doesn’t harbour any regret over his purchase of the D5 number plate, pointing out that auction proceeds go to charity. What he does feel discomfort about is having to discuss it, especially in light of criticism he’s received from those who view his spending as frivolous.
“I don’t enjoy talking about it,” he admits. “It feels like I’m showing off my assets. And [the number plate] doesn’t define me as a person. I’m still who I was before I bought that number. Nothing has changed.”
Nevertheless, Sahni concedes that the results of this publicity have not been wholly negative. “Something good has been happening since I got the number,” he explains. “Everybody knows I have cash, so I’m getting good deals. I have brokers and landlords calling or [sending me text messages,] offering good deals.”
And it’s not just local offers that have been coming his way. Sahni says he’s also been receiving invitations to develop real estate projects in other countries, although he emphasises that these proposals are of limited interest to him.
“I know the systems in Dubai. I’ve made a name here, [and] I get approvals easily,” he explains. “My friends tell me to invest in London or go to the US. I have investments in the US, but it takes time. It’s a nightmare to get approvals in other parts of the world.
“I want to focus on Dubai. I’m happy working in one city, and I think I’m lucky here. I don’t want to shift my luck.”
Born and raised in Kuwait, RSG International’s chairman started investing in Dubai real estate in 1996, eventually relocating to the UAE in 2006.
Remarking that “things have been great” for him in Dubai, Sahni attributes his company’s success to his conservative way of doing business. “I’ve always been conservative – never too greedy – and I never took bank loans. I don’t sleep [much] during the night, so I just think of how to save, of how I’m going to buy or sell [a property].
“In the last five or six years, I’ve been in property development, so now I just concentrate on how I’ll be able to save on cost, how to deliver. I brainstorm at night.”
Sahni says that he applies the same conservative philosophy to his company’s development strategy. “RSG works differently [from other developers],” he explains. “It always has the [funds] ready to finish the project. It never builds to sell; it always builds to rent. That is the thought process [behind RGS’s ventures]. We have sold and will sell in the future, but the mindset is that of building on our own and leasing, [especially] if selling is not a strategic move for the project. That is our strategy.”
Building to rent is an emergent trend in the UAE market, he notes, adding: “Today, what are the other master developers doing? They are building to rent. What I was [already thinking] a couple of years ago, the master developers are doing [now]. Only some are selling, but [the others] are making their own portfolios, [which is a safe] bet because Dubai will never stop growing.”
Sahni says that his confidence in the city is unshakable, even though he acknowledges that the property market is witnessing saturation – particularly when it comes to high-end properties.
“There is an oversupply, but [Dubai] is not going to stop growing,” he states, sharing that as far back as 1990, when he was still in Kuwait, he was already hearing about economic crashes affecting the market. “But it always bounces back. Dubai is lucky. Dubai is a blessed city.”
Sahni’s confidence in Dubai’s ability to weather economic storms is reflected in RSG’s current portfolio of developments, both under construction and in the pipeline.
“We are not going to [stop building] because we have our own land bank and our own bank balances to build [the projects],” he notes. However, Sahni stresses that although it has the funds, RSG is not interested in taking on a “crazy” number of projects simultaneously. He prefers to focus on one project per year.
“We are not building five or seven projects,” he says. “[In fact], this is the first time that RSG is doing three projects at the same time.”
One of these projects is Burj Sabah, a residential development that is being constructed by Team Engineering Enterprises. Located in Jumeirah Village Circle (JVC), this project was originally intended to complete in December 2019, but Sahni says it may well be ready for handover one year early. Indeed, RSG, Team Engineering, and their fellow stakeholders are gearing up for a December 2018 completion.
Impressively, this timeline does not seem overly ambitious. Burj Sabah reached a key milestone in September 2017, with the successful casting of its reinforced concrete raft foundation.
The 19-storey building, which comprises a combination of studio, one-, and two-bedroom apartments, was designed by UAE-based Al Asri Engineering Consultant.
One of Sahni’s regular collaborators, the consultancy has had involvement in all of the projects within RSG’s portfolio, including Building No 4, a commercial property within Dubai Properties’ Bay Square master development; and the $122.5m (AED450m) Qasr Sabah residential project, which is located in Dubai’s International Media Production Zone (IMPZ).
In addition to Burj Sabah, RSG is currently working on the development of two hotels, which represent the firm’s entry into Dubai’s hospitality market. The four- and five-star developments are located on the emirate’s Sheikh Zayed Road.
Sahni tells Construction Week that the main contract for the five-star hotel, Sabah Rotana, has been put out to tender. His firm’s as-yet unnamed four-star project, meanwhile, is in the design stage.
Commenting on his decision to partner with Rotana, he explains: “For a year, we met with a lot of hotel operators, but we found Rotana very [motivated] and helpful. Hospitality is a new industry for me, so I needed someone to support and guide me, and I found that with Rotana. That is why I signed the five-star and four-star hotels with them. And I’m going to sign one more hotel with them, a three-star – but it will be under their Centro brand.
“[RSG is also] planning to do a very big mixed-use project next year –around 2,000 units. It will be on Sheikh Mohammed bin Zayed Road, but that’s still [in the planning phase].”
Sahni concludes: “We know there may be an oversupply, but that does not make a difference. [You build and] people will come. Listen, the Dubai government has thousands of consultants [carrying out] feasibility studies. If the Dubai government is building and not stopping, why shouldn’t I [build as well]?”