Posted on June 27, 2015

One thing that Qatar is not short of is real estate development. With population growth averaging 2 percent annually and visitor numbers rising by double digits, the construction industry has been run off its feet, said Arabian Business. But while heavyweights such as Qatari Diar, United Development Company, Msheireb and Barwa Real Estate take the headlines for their master-planned projects, Al Bandary Real Estate has been making a profit by filling in the gaps, building individual villa compounds and towers that are comparatively smaller but arguably equally essential.

The firm has completed standalone residential, commercial and retail developments in most of Doha’s key locations, including Lusail City, The Pearl-Qatar and Al Dafna in the heart of the capital. However, the subsidiary of Al Bandary International Group recently upped the ante, announcing the country’s first major water park — at the base of a landmark twin tower development. Plans for Amwaj Suites and Residences include two 29-storey towers on the shores of the Arabian Gulf, with the wave-shaped water park featuring several swimming pools, an artificial wave pool and water rides.

Al Bandary Real Estate general manager Maen Al Haj says the firm has already signed a management agreement with WhiteWater, the Canadian company that also runs The Atlantis on The Palm Jumeirah and Yas Waterpark in Abu Dhabi. The project, in which only “very selected people” would be allowed to live, will signal a new era for the private developer. “It will be the most luxurious tower in Doha,” Al Haj says. “Our [Al Bandary Real Estate’s] identity is going to be here.”

Construction is due to begin this year and take three years. At the same time, Al Bandary is building a unique project of 28 floors of duplexes called The Dream Tower. The project overlooks a marina within the $45bn Lusail City master-plan north of the central business district and would be Al Bandary’s second in the development. Lusail City, overseen by Qatari Diar Real Estate Investment Company, includes four man-made islands and 19 multi-purpose districts covering 38 sq km and will feature an 86,000-seat stadium that will host the final of the FIFA World Cup in 2022. It is expected to have a total population of 450,000 by the time it is completed in 2020, including 200,000 residents, 170,000 employees and 80,000 visitors.

Al Haj says his development will benefit from his prediction that Lusail City will become a satellite capital once completed. “Lusail City is the future — everyone knows that Lusail is going to be the future new capital of Qatar,” he says. “We have a different kind of vision there.” The Qatari government also plans to move its ministerial buildings to the new city, which Al Haj says will lead to a demand in nearby office space. Al Bandary also has taken advantage of the new city in building its 700-villa Al Kheesa Gate development opposite Lusail City, which the developer says is almost sold out.

Al Kheesa Gate is the firm’s largest project to date. But the young developer is gaining ground and Al Haj indicates there is a bright future. “Every day we are building a new area [of Qatar],” he says, referring to the industry as a whole. “It’s an ongoing process for 10-20 years, until the 2030 vision of the Emir. Most of the real estate development companies are getting the benefit of developing in the country.” It is true there is an apparent endless need for developers in the country. Doha will be 100,000 homes short of demand by 2017 based on current population and construction projections, Al Argan Investment Company chief information officer Ramy Echo said a year ago, while warning the city risked creating slums if it did not immediately address its affordable housing shortage.

Echo said about 250,000 homes needed to be built between 2014 and 2017 but only 150,000 were planned. Qatar’s population of nearly 2.4 million is expected to rise to as much as 3 million before the end of the decade, with the majority of new people set to be foreigners, who already make up about 85 percent of the population. Analysts have warned the key will be building affordable housing, particularly for the 1 million expats who will be living in their own accommodation rather than in labour camps.

However, like most of the real estate developers in Qatar, Al Haj argues there is still plenty of growth in the luxury segment and that is where he will remain focused. “We are looking always at luxury sectors, with very high and unique designs,” he says. “Because we are here in Qatar — it’s the market. Most of the Qatari clients are looking for luxury and unique designs and luxury items and materials. Also they need quality; most of them have their own home for their whole life so they need to do it in good quality to be there for 20-25 years. “We don’t mind doing business for mid-level or high level but what we understand, what we can see, is that most of the people are looking for high quality. It shows that most people are in good financial positions.”

It also makes far more financial sense to invest in the luxury market. The exponential price of land in Doha presently means it is effectively not worth building affordable housing because the profit margin is so slim. Land now typically makes up half of the overall cost of a development, with prices soaring by as much as three times in the past four years. Land sales made up about 50 percent of the $7bn worth of all property transactions in the country during the first quarter of 2015, according to Deloitte.

Values have reached a point that some owners — often citizens who have inherited it — are preferring to profit by flipping land rather than developing, according to several developers and investors who spoke during Qatar Cityscape last month. Al Haj agrees land is scarce but is careful to insist the government is releasing what land it has that is developable. “The amount of land ready in Doha for development is not much, so this is what gives value for any project we do,” he says. “You do have a lot of empty lands but it’s not ready for residential [construction]. “So that’s why the market is booming. We understand… most of the projects are fully occupied. Even for renting you can’t find [available leases] now because it’s occupied and whenever it’s not the price is very high because the demand is very high.”

But Al Haj argues there is still plenty to be developed within existing master plans. Al Bandary last month launched Jumana 2, a high-end residential tower in The Pearl-Qatar, a mixed-use development on a 4 million sq m artificial island off the coast of West Bay, in Doha’s north. The development is the first open to foreigners for freehold ownership and Al Bandary has been keen to target foreign investors for its projects there. Al Haj says interest immediately following the launch of Jumana 2 was higher than expected.

The developer also has brought to Doha the concept of buying and leasing hotel apartments through its Al Thuraya mixed-use hotel and residential tower in Al Dafna area and intends to offer the same at Amwaj. Meanwhile, it is putting its stamp on the Doha map with the Al Bandary Business Centre, with 300,000 sq m of office space, as well as retail, entertainment and services, at Al Waab in the city’s west. Its name also will feature in B Square Mall, a 25,000 sq m retail complex in Al Thumama, near the new Hamad International Airport. The ‘B’ stands for Bandary, while the square refers to a central area that features in the mall design.

The firm’s second retail development is Doha Souq, which Al Haj says despite replicating traditional architecture, it will be a luxury mall, similar to the concepts of Jumeirah Group’s Souq Madinat Jumeirah and Emaar Malls’ Souq Al Bahar in Dubai. Already under construction, the souq is due for completion in 2017 but Al Haj will not reveal its future retailers. He argues its location “in the heart of Qatar” will make it the most popular luxury shopping destination, even outdoing the renowned Villaggio Mall because of its closer proximity to residences and the business district.

A dozen new retail areas are under construction in the city, including the mammoth Mall of Qatar, which will be the largest mall in the country when it opens later this year, only to be overtaken by Doha Festival City, when it opens in 2017 with more than 200,000 sq m of retail space. But Al Haj is not deterred. “The market is there,” he says. Indeed, Al Haj argues shopping centres are crucial to Doha’s entertainment offering, referring to them as the answer to some expats’ complaints that there is not enough to do in the city.

“Always, people are asking about activities, meanwhile the number of new malls with a kids area compared to the market right now is more than enough and with the coming number of new malls and new activities it will… cover the people who live here and more. Most of the people during summer time look for enclosed entertainment,” he says, although he won’t yet reveal what entertainment products he is planning for Doha Souq or B Square Mall.

As a subsidiary of Al Bandary International Group, much of the real estate firm’s developments are constructed in conjunction with Al Bandary Engineering, the start of the now-expansive conglomerate. Engineer Ahmad Al Rayyan launched Al Bandary Engineering amid the construction boom of 2006. As the Qatari economy skyrocketed, so too did the company’s fortunes and interests, leading Al Rayyan to also branch into real estate, hotel management and food and beverage. Al Haj will not reveal the private company’s financials but is positive about its current and future position. With its finger in multiple segments of real estate — an industry with a seemingly endless need in Qatar — we may well be seeing even more of Al Bandary Real Estate in the future.