Eyeing Dubai

Dubai, the business hub of the United Arab Emirates (UAE), is known for being a site of innovation and luxurious design. Made up of 80% expats—individuals living and working outside their home countries—Dubai is a melting pot like no other. The population is transitory, comprised largely of the world’s best talent pool, selected based on skill and knowledge rather than location or citizenship.

In recent years, the government has increasingly done more to make the emirate open for business and international investment. These steps include expanding visa opportunities and creating more free zones, which allow for free international trade with fewer restrictions. To further advance these initiatives among its diverse population, Dubai created the world’s only Minister of Tolerance and Minister of Happiness as official government positions.

In a city committed to inviting the world in and where everything is so new, real estate managers often bring in other countries’ best practices and globally established standards to apply alongside adherence to local laws. This atmosphere makes management in Dubai truly unique.

Bluewaters Island

No location exemplifies Dubai’s newly built environment more than Bluewaters Island. An artificial island built to extend land coverage and provide more ground for construction, Bluewaters Island houses the world’s largest Ferris wheel, Ain Dubai, as well as residential complexes consisting of 10 buildings with more than 700 multifamily units. The site also features 17 townhouses as well as retail and entertainment zones. It’s also home to the world’s only Caesars Palace location outside of Las Vegas, which, for now, features only the hotel and no casino.

In 2020, Bluewaters Island developer Meraas joined Dubai Holding, a diversified global company operating in 13 countries and employing more than 20,000 people, to oversee the island’s management. The new collaboration will manage all aspects of the island’s development except for the Caesars Palace area, which Caesars manages, and the community mosque, which is run by the General Authority of Islamic Affairs and Endowments (Awqaf).

Dubai Holding’s real estate business has developed strategic destinations and communities that offer unique and attractive lifestyle opportunities to meet the evolving needs of Dubai’s residents and visitors. As a master developer, Dubai Holding invests in sustainable infrastructure, accessibility, community amenities, landscaping, and family-focused facilities such as community centers, mosques, schools, and supermarkets.

Glen Aranha, CPM^®, Dubai Community Management (DCM)

“For this reason, the biggest Ferris wheel in the world is right here, and in front, we’re putting up the region’s largest Christmas tree,” says Glen Aranha, CPM^®, who works for Dubai Community Management (DCM), part of the Dubai Holding Asset Management team. He’s referring to the plaza of Ain Dubai at Bluewaters Island, which boasts standing space for up to 6,000 people and is used for hosting large events. The DCM team, for example, recently took part in the 9th edition of the Dubai Women’s Run. Approximately 3,000 women and girls participated in the event, which was held in the plaza under the wheel.

Hospitality, experience, and prestige

Dubai is all about hospitality, customer service, experience, and prestige. This is evident in how the company manages the high-end residences on Bluewaters Island.

Hend Morsy is part of the Dubai Holding Asset Management Team at Bluewaters Island and manages the Residences at Caesars Resort, one of the 119-unit buildings currently at 100% occupancy. Units range in size but can rent for up to $100,000 a year for a one-bedroom apartment. Prices reflect the unblocked views of the skyline, the Ferris wheel, and the level of service more than the size of the unit alone. The team highlighted that while prices took a dip during COVID, they’ve since recovered, ending 2022 at all-time highs thanks to their location and destination status. These fluctuations are reflected in cap rates, too, which used to run at approximately 7.2% but are now up to 7.8%.

The resident makeup of Residences at Caesars Resort couldn’t be more diverse, and Morsy highlights that her hospitality background has served her well in handling their equally wide-ranging requests. Even though the building houses residences, she often approaches it more like a hotel due to the type of service demands and the diverse and transitory nature of the clientele. It can be especially challenging to ensure residents always abide by community rules, but with strict enforcement, tenants quickly comply.

A commitment to diversity

With only 20% of the population made up of Emirate nationals, helping expats feel comfortable and quickly find a sense of community is crucial to successful management in Dubai.

In the last few years, even more expats have found a home in Dubai as a result of expanded initiatives by the government. For example, in 2019, the UAE introduced the Golden Visa, allowing visa-holders to maintain residency for 10 years. Unlike previous visa programs, residency under this visa isn’t contingent on an employer and allows expats to live more freely, even permitting 100% foreign ownership of businesses. In addition, exclusive to Dubai is the creation of the Dubai Association Center, charged with facilitating the entry of international professional associations into the Dubai market. They’ve also increased the number of free zones like the Dubai International Financial Centre, which allows transactions in U.S. dollars and has Common Law courts.

The UAE is aware that it provides low-wage employment opportunities for individuals from less-developed countries looking to send remittances home. Since they are short on local labor, the country has embraced this global position and set up social structures to allow workers to come into the UAE more easily, providing them with housing, healthcare, and other services while working outside their home countries.

Francis Giani, chief community management officer of Nakheel Management, which specializes in community management, stresses that management in Dubai goes beyond the basics of running a property. Instead, it’s mainly about creating a sense of belonging. Managers must foster a welcoming and open environment that helps individuals connect and acclimate quickly. With so many nationalities and people constantly moving, immediately creating that sense of community is key to running a property where people participate and are engaged. Giani and his team do this through community activities, amenities to create interaction, and openness and responsiveness to client feedback.

Shifting laws

Condominium and community management in Dubai is a major business, as most residents prefer to live in planned communities. The laws governing condominiums are constantly shifting as new regulations are introduced to deal with the continually changing landscape.

Most recently, in 2019, a law concerning condominium ownership called Law 6 was introduced. The law intends to centralize control of individually owned units within a community. Before this law came into place, condominiums operated as they do in most parts of the world. Individual unit owners automatically became members of their building’s homeowner’s association, and their board was then charged with property management.

Under the new law, property developers are now responsible for managing their buildings. The developer may appoint a management company approved by Dubai’s Real Estate Regulatory Agency (RERA). Unit owners become advisors and may join a committee to provide input. Though the committee doesn’t enjoy any executive powers, if owners within a given residential community feel the management company is not performing, they can approach the regulator through RERA, which has the power to intervene and even replace the management company.

Local property managers are still making sense of what this will mean for long-term management practices. For now, though, the new law has helped standardize community operations across the emirate’s residential properties.

At the forefront

Waqar Hasan, CPM^®, Community Associations Institute

The sheer speed of development in Dubai has left a gap in local best practices. While the Emirate’s buildings are cutting-edge, real estate management remains a relatively new profession for local practitioners, who are predominantly brokers. For this reason, IREM and its members in Dubai are on the frontlines working to craft localized practices that ensure buildings last as long as they can and their residents are happy.

“This is IREM’s time to establish itself in the market,” says Waqar Hasan, CPM^®, president of the Community Associations Institute, Middle East. “Dubai is all about building relationships and creating experiences. Real estate managers are uniquely positioned to play a very important role in furthering the UAE’s happiness, tolerance, and sustainability agenda. I see IREM as a key player in advancing the real estate management industry by equipping local property managers with the right skills and international best practices.”