Dubai-based Samana Developers told Zawya Projects that it will enter the luxury hotel sector this year with the launch of two five-star hotels in Dubai.

The developer remains optimistic about the outlook for the Dubai property market as it announced plans to launch 12 new projects worth AED2.5 billion (US$680 million) in 2023.

"The locations of the projects have been identified and plots have been secured," Farooq said, adding that 20 per cent of the new projects are planned for the hotel sector, while 80 per cent will target the residential market.

"We are in the process of obtaining approval for design drawings and between 60 and 80 per cent approval for all projects. We expect to have all approvals within a few weeks."

Farouk said the company intends to hire contractors as soon as it starts the project.

"The appointment of contractors and subcontractors usually coincides with the start of the project," he added.

The developer's hotel properties will be handled by a new entity, Samana Holidays.

The first two five-star hotels will be developed in high-demand locations and the CEO said they would have between 400 and 500 keys.

He said negotiations with the multinational hotel operator were at an advanced stage, adding that he expected to secure the agreements by the end of the first quarter of 2023.

Earlier this month, Dubai's Ministry of Economy and Tourism said the average occupancy rate for the hospitality sector in 2022 was 73 per cent, one of the highest in the world, up from 67 per cent in 2021.

The emirate's hotel inventory stood at 146,496 rooms in 804 hotels at the end of December 2022, compared to 126,120 rooms in 741 hotels at the end of December 2019.

On the other hand, Samana Holidays has converted 500 units from its existing completed residential projects in Dubai into serviced flats.

"We expect to receive Dhs38 million from these holiday home units. Our homeowners will receive a return of 15 per cent instead of the traditional 8-10 per cent for residential investments in Dubai real estate," he noted.

A focus on luxury

On the residential side, Samana Developers is currently focusing on the mid-luxury segment, but will eventually move to the super-luxury segment in the first half of 2023. No details were shared about the ultra-luxury projects.

"Traditionally, demand for Dubai real estate has come from all over the world. We expect our top five buyers in 2023 to come from Europe, Eastern Europe, the CIS, Russia and the GCC, in addition to China and India.

"This is in line with the UAE's efforts to attract tourists from inflation-hit Europe and the UK. Dubai is attracting these regions with its sunny beaches, lower cost of living and tax incentives."

Farooq said the 12 new projects would be self-financing.

"All our projects are self-financing, with zero borrowing from banks. This is because we are a post-transfer developer, as the inflow of delivered project funds has significantly supported the funding and start-up of the projects."

Investment plans  

The Samana developer managed the construction process by delivering the $110 million Samana Hills project, despite construction challenges related to the COVID-19 pandemic and site labour restrictions imposed by the authorities in early 2022.

According to the developer, other projects - Samana Waves, Samana Miami and Samana Santorini - have been sold out.

It has also fast-tracked the construction of the A$130 million Samana Park Views project, as well as the Samana Waves and Samana Golf Avenue projects.

Despite its growing property portfolio, Farook ruled out plans for backward integration through the acquisition of a contracting company.

"But we intend to expand our quality control and engineering teams, with strong oversight of contractors and consultants," he said.

Samana Development will further increase its quality control and engineering team from five to 15 this year.

"With all this in place, we see 2023 as another bullish year for us as our development plans and expansion are always supported by the UAE's investor-friendly regulations and attractive visa regime, particularly the 10-year direct residency gold visa for property buyers and their families," he said.