Omniyat’s decision to re-launch two stalled residential developments as hotel projects highlights a growing investment trend across the United Arab Emirates
Dubai developer Omniyat has re-launched two of its previously stalled Business Bay residential developments as hotel projects in what the company’s executive chairman and CEO describes as a ‘significant value increase’.
Speaking ahead of the recent Global Cityscape trade event, Omniyat executive chairman and CEO Mahdi Amjad described plans for the developer to shift away from residential-only developments to more diverse and, it believes, lucrative hotel-residential projects.
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“It increases the value at least 30- 40% for the owners who have previously purchased, and effectively brings by far a better product to the market,” explained Amjad.
The first of the two projects is The Opus, which will be a revamp of the 23-storey retail and commercial tower it launched in 2008, which will now also comprise a five-star, mixed-use hotel and apartment development.
Amjad said the new Opus development is to be designed by Iraqi-British architect, Dame Zaha Hadid, the first hotel and apartment project to her name, with the hotel to be managed by the ME by Melia hotel brand, owned by Spain’s Melia Hotels Group.
Omniyat’s second project, The Pad, is also a reincarnation of the company’s 2007 development of the same name, comprising a 231-apartment, 24-storey tower that was originally due for completion in 2009.
Amjad said the new development would be “a very cool, hip hotel” and hoped it would be finished in mid-2015 as the first of a chain of properties under the brand, The Pad.
The move by Omniyat appears to mirror a growing trend for developers and investors to use the strong recent performance of Dubai’s hospitality market to maximise return on investment for upcoming, as well as existing, developments.
According to STR Global, Dubai hotel’s RevPar increased by 15.5% to AED552.50 ($150) for September compared to the previous year, which appears to be the driving force behind the recent decision by the Media Rotana Dubai hotel to convert its apartment tower into more hotel rooms, in a move that will increase its current 460 keys to a total of 540 by the middle of next year.
Speaking after the decision was made, general manager Rabih Melhem revealed that due to the hotel’s location in Dubai’s Tecom area, and the hotel’s typical target market of short term business travellers, increasing the number of hotel rooms became the most financially viable option.
“We believe as a five-star hotel located in this area, there is high demand for hotel rooms vs. hotel apartments, especially with the area being surrounded with a lot of hotel apartments it’s a bit of a challenge for us to compete,” explained Melhem.
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