Schools in the community

Schools in the community: developers learn the lessons

We ask developers, brokers and parents how schools are an important determinant when house-hunting

For most parents of schoolgoing children, an hour saved on the school run is quality time they’d rather spend with their kids around the breakfast table or on a much-needed weekday lie-in. With neighborhoods and communities in Dubai becoming increasingly self-contained, it’s easy to see why neighborhoods and communities with schools rank high on the list of house-hunters. Most families still factor in aspects such as savings on school transport, less time on the roads and higher property appreciation rates to justify moving to a new house close to schools.

When deciding on a new home, good schools are as important as parks, jogging and cycling tracks, recreational facilities and health centres. Developers have also observed such realigning of priorities among homebuyers.

“Generally, as soon as the master development is confirmed, the master developer tries to find the right school for that piece of land,” says Fadi Nwilati, CEO of Kaizen Asset Management Services. “The master developer will usually find an investor who is interested in building a school and the school will then rent that facility.”

Jyotsna Hegde, president of Sobha Group, affirms that the presence of schools within a community is influencing buyer sentiment. “A school is one of the primary things people look into when deciding to live in a high-end community like ours,” says Hegde. “We have two top-notch schools within Sobha Hartland — the Hartland International School and the North London Collegiate School.”

End-user preferences

Seda Tutu, deputy CEO of sales and marketing at Azizi Developments, agrees the proximity to schools is key for any residential project. Five of the developer’s properties in Al Furjan are located close to a new school opening this year.

Dubai’s growing end-user market is also dictating the preferences of prospective buyers. “A lot of end users are families and a major concern for anyone with a child is schooling,” explains Paul Kelly, operations director of Allsopp & Allsopp.

Nwilati also points out another interesting point about young families in search of new homes: “Proximity to nurseries is extremely important. When you are a new parent, you want to be closer to them geographically.”

Still others simply want to be closer to good schools. Ishita Bhattacharya Saha and her husband moved to Dubai Silicon Oasis from Jumeirah Beach Residence (JBR), where the couple owned an apartment, so her daughter can be close to the Dubai English Speaking College in Academic City. Saha says the fact that the school bus network did not extend towards JBR was a logistical obstacle.

Apart from the short commute to school for her daughter, Saha says the family has also enjoyed the amenities in the new community. “There are various extracurricular offerings in the neighborhood such as music and dance classes and fitness clubs.”

According to Sally Ann Ghai, associate director of Luxhabitat, when searching for a new home, buyers who prefer locations close to schools also cite a sense of community, well-laid out road systems and the quality of finish in a home as top priorities.

Probing further into the buyer demographic of various communities draw, John Stevens, managing director of Asteco, says some nationalities prefer certain locations than others. “Given that Dubai is home to approximately 200 nationalities, with developers offering a wide selection of living experiences that cater to various groups, income brackets and cultures, there is certainly something out there for everyone,” says Stevens. “For instance, in our experience, GCC clientele prefer to live in Jumeirah, while areas such as Arabian Ranches and Motor City attract European expats. On the other hand, high-rise living in Downtown or Dubai Marina is what most singles and couples without kids prefer.”

What developers want

Developers, too, have various parameters when considering educational institutions for their communities. Mohammad Kaiser Azad, head of community management at Emaar Community Management, says, “Our approach is to develop the concept of the lifestyle development first, and then decide on the schools based on this.”

Damac Properties is following this template for residents in one of its developments. “From the faculty members to the playgrounds, the schools our children attend prepare them to be lifetime contributors to the global community,” says Niall McLoughlin, senior vice-president of Damac. “A recent example is the Jebel Ali School. Damac facilitated the opening of this new campus to ensure families living within our Damac Hills community have convenient access to quality education.”

Among the communities with easy access to schools, Al Barsha, Al Sufouh, Jumeirah, Dubai Silicon Oasis, Nad Al Sheba and Meydan top the list of buyers and renters. Communities that have captured a sizeable market share include Emirates Living, Arabian Ranches, Victory Heights, Jumeirah Golf Estate, Jumeirah Village Circle and Jumeirah Village Triangle. Kelly says the area around Dubailand and communities such as Falcon City and The Villa Project could also be places of interest for couples with schoolgoing children.

Other considerations

Nonetheless, some communities could still be more attractive than others despite having schools nearby. Anoop Bhargava, who is renting in Jumeirah 3, says he considered the close driving distance from both Dubai College and JESS Jumeirah for his two children, but “being located close to a mall, supermarket, parks, play areas within malls and the beach” was also important.

Kelly puts things into perspective when he says, “People will sacrifice what they want themselves if they can get their kids into a good school and get into that neighborhood. What you find then is not just a school, but also all their friends. It’s all about the whole social aspect for the kids when you choose a school that is located close to where you live.”


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Published by Gulf News | September 10, 2018

Alternative financing schemes to fuel property investments

Specialised funds to help create new demand

New financing options could further enhance the attractiveness of Dubai’s property market for both local and foreign investors. The Mortgage Law recently proposed by the Dubai Land Department (DLD) will be a key instrument that will bring in more specialised funds and create alternative financing beyond standard funding from banks. The new law could, for instance, allow institutions other than banks to take mortgage security over property, which, according to Daniel Le Moeligou, sales director at Home Matters, will open the market to private financing from domestic and international sources.

“This is not necessarily geared towards the traditional home purchase, but rather the non-standard finance market such as developers, corporates or persons with more complicated financial circumstances that cannot access the traditional bank financing market,” explains Le Moeligou. “The alternative financing methods will not necessarily feed money directly into the residential property market, but rather put liquidity into areas of the property market that have challenges getting access to traditional financing from the banks. With wider access for debt issuance against properties, the indirect impact on the UAE market is a greater possibility of significant investment from global institutional money.”

Le Moeligou says there are structural barriers to creating demand for alternative financing, the major one being the ability for the security holder to repossess in the case of default. “Current local banks and lenders can allow for up to two years for any repossession after default and is often a very expensive proposition,” he says. “To get significant take-up in an alternative financing route, it would be beneficial to address issues around being able to enforce the security.”

Current schemes

To attract buyers, many developers currently offer generous payment plans of up to 10 years wherein the bulk of payments are made on or after completion. Other developers also offer guaranteed returns or rental income, usually within three to five years.

The sale and leaseback model is another scheme that has been prevalent in Dubai. “The model has been popular in Dubai, particularly in the education sector, and provides support to the real estate market when traditional direct bank finance is limited,” Alexis Waller, partner and head of real estate at Clyde & Co.

Mortgage cap

As Dubai sees year-on-year growth in mortgage activity, easing the loan-to-value (LTV) ratio on the mortgages will be a significant step that will lower the entry barrier into the Dubai real estate sector, says Fadi Nwilati, CEO of Kaizen Asset Management Services. “Take ready property transaction as an example: a residential unit valued at Dh1 million under today’s mortgage rules indicate that you need to have around 20 percent down payment plus around 7 percent to cover all property transaction fees. That’s Dh270,000, which majority of the market doesn’t have, and hence are priced out,” Nwilati explains. “Increasing the LTV will open the market to a bigger investment pool.”

To prevent abuse, Nwilati says the policy may be readjusted only for first-time buyers. “If it is done for first-time buyers, it would cater for those who need it most.”


Also expected to be a key focus area of the new law is the integration of the real estate and capital markets, analysts say. Real Estate Investment Trusts (REITs) will play a vital role in this respect, explains Allsopp. “What this means is that an individual can invest into the property market without having actually to buy the property themselves,” says Allsopp. “This can help in many scenarios, whether it is from a cash point of view, the amount of risk you want to take or the amount of exposure you want.”

REITs account for 40 percent of listed real estate in countries such as the UK and Singapore, but they only account for 5 percent of the UAE real estate sector, says Nwilati.


Crowdfunding is another platform that Nwilati describes as a “win-win” solution for both developers and investors.

“It allows developers to target a larger pool of investors through technology and keeps investors updated on fundraising activity,” says Nwilati. “We have seen the launch of crowdfunding platforms like DuRise, Eureeca and Estate-Up in Dubai.”

In June, Dubai saw the first deal of an individual unit sold on a digital crowdfunding platform. Three investors pooled their money to be part owners of a Dh365,000 studio in Remraam. The property will potentially generate a net yield of 8.7 percent, which will be distributed to the investors in proportion to their investment, according to Siddiq Farid, CEO of Smart Crowd, a digital real estate investment platform.


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Published by Gulf News | September 01, 2018