By: Mahmoud Gamal
Dubai – Mubasher: Preatoni Real Estate is looking to expand in the UAE through acquiring several unsurpassed projects in the GCC country, the firm’s CEO said.
The Italian developer does not plan to go public on the UAE’s local stock markets, Edoardo Preatoni told Mubasher in an interview.
Preatoni Real Estate is specialised in financial services, hospitality and real estate developments.
It has a large portfolio worth $2.5 billion and up to 3,000 employees.
The European real estate developer had compiled achievement records and success stories over vast geographical locations covering Europe, Middle East, Baltic States and the Russian Federation.
The company built three international malls and 29 hotels across the world.
The real estate group previously revealed that it has rescued “distressed projects” such as Preatoni Tower JLT (Dubai Star), four years after its initial developer abandoned the multi-million project, due to the global financial crisis.
The Preatoni Group came to the project’s rescue and pumped over AED 50 million to complete the Dubai-based development on time.
Spread over an area of 600,000 square feet, the 45-storey property comprises 554 commercial and residential units.
Below is Mubasher’s exclusive interview with Edoardo Preatoni, CEO of Preatoni Real Estate:
Mubasher: What are Preatoni’s future projects?
Edoardo Preatoni: Preatoni Real Estate will continue its search for distressed properties, where the construction site could be re-opened and we could replicate the successful model experimented in the Preatoni Tower.
There are still thousands of units sold off-plan and never delivered to the end user: we have proven that this kind of situation can be solved by a developer such as ourselves, who has decades of experience in the international real estate sector.
Furthermore, we are currently planning on developing a synergy with our sister company Domina, the leading timeshare company in Italy and owner of 20 hotels in some of the world's most prestigious locations.
Preatoni Real Estate will open the gates of Dubai to Domina, allowing the clients who are members of the Domina Vacation Club to add one more destination to their portfolio: the beautiful city of Dubai.
Mubasher: Does the firm plan to go public on the UAE equity markets?
Edoardo Preatoni: We are not currently planning on doing such a thing in 2019.
Mubasher: What are the company’s plans for 2019 and the next five years?
Edoardo Preatoni: After the great success of Preatoni Tower, it is hard not to be tempted to replicate the same formula. However, nowadays the market conditions change rapidly, especially in a young and dynamic environment such as the one we have in Dubai.
We are confident we'll find other distressed projects to take over, but we are also working on parallel plans to extend our operations in other segments of real estate in addition to our property development activities.
As previously mentioned, having sister companies that have decades of successful track record not only in the real estate sector, but also in the tourism and hotel businesses, will greatly facilitate our task of continuously redefining the high standards and the scope of work of Preatoni Real Estate.
Mubasher: What are your expectations for the real estate market in Dubai and the UAE?
Edoardo Preatoni: We are not certain about the development of the sector in the near future, and probably no one is. However, we are certain that a traditional approach to real estate will be a vastly inferior approach as compared to a new and innovative one.
In our opinion, the UAE real estate market has a considerable potential of innovative growth in the coming year. When it comes to traditional development, where you buy a piece of land and sell the units after or during construction, we feel that there are many players in the market who are following this business model, and we would not be adding any real value.
This doesn't mean that there are no opportunities left: we simply feel that in order to bring something to the table we need to be very innovative, and that would be my suggestion to any other new investor in town.
Mubasher: What does the UAE’s property market need to recover?
Edoardo Preatoni: I hope that there will be less supply on the market, thus stopping the decline in prices and in the volume of transactions which we have witnessed in the past three years. However, the macroeconomic cycle of the real estate is not something that directly affects us, as we have chosen to operate in the niche of revitalizing already distressed project.
Solving the issues of the thousands of people who have bought off plan during the pre-crisis years and who have never received their unit should be a priority, and I am confident that the authorities are working in this regard. I hope there will be a clear legal framework to attract new potential investors in the Country, and that there will be enticing conditions to attract new capital in the sector.
I travel a lot in Europe for work, and I frequently encounter people who have had an unfortunate experience in investing in the property market in Dubai. In order to re-establish the image of the Dubai real estate sector in advanced economies, some action needs to be taken for these people: to have someone who bought an apartment in 2006 still not know if they are ever going to get something in return is something that does a lot of harm to the credibility of the sector.
Mubasher: What about challenges facing your company?
Edoardo Preatoni: The main thing would be to keep on growing organically while not forgetting to do something about the stalled properties, as I previously mentioned. The local authorities have proven in the past to adapt in a fast and dynamic way to new challenges, and I am sure this will also be the case in the upcoming months.
