Gulfstream UAE: A Cut Above The Rest

Khaleej Times met with Sebastian Carlton, CEO of Gulfstream UAE, to learn more about his real estate firm re-entering the market with a unique design and value approach to housing in the UAE. Taking us through the history of Gulfstream, Carlton spoke about the original board of directors that came together in 2004 having previously being involved in the delivery of major projects in Dubai such as The Grand Hyatt, Twin Towers, and the Jebal Ali Racecourse.
With that first group of directors they looked deeper into development opportunities and formed a separate company entitled Gulfstream (www.gulfstreamuae.com). He commented on the dynamic financial condition of the UAE real estate market and the type of supply targeting luxury housing during 2004 to 2007; during this period Gulfstream established a significant land bank in Jebel Ali, Jumeirah Village, Dubai Investment Parks, and DWC areas. They bought land at prices that could deliver significant value for end-users and shareholders. Sebastian Carlton and his board made sure to capture these land assets without incurring large debt obligations, so when the financial market went through restructuring, it meant they could hold on to these assets.

In 2006/7, Gulfstream engaged with and then appointed Sheikh Mohammad bin Maktoum bin Jumah Al Maktoum as Board Director and Partner as a strategic step in establishing and enhancing local relationships. When the market showed signs of recovery in 2013 they were able to re-enter the market and design specific products to match the demand market.
Explaining Gulfstream's core expertise, Carlton highlighted the three primary sectors the company focuses on. The first is their pure Residential product - it focuses on residential housing for the local and expat market; avoiding high-end offerings in the current situation of the market. Instead, they believe that the current market dynamics leading up to Expo, will generate demand for more affordable housing and value driven products.

The second primary sector is their Residential Investment market, where they achieve yields of 8-10% on an ungeared basis. The final sector involves Serviced Apartments - which is proving to be a very dynamic sector, due to the UAE's establishment as a strategic business and leisure hub.
The current project Gulfstream is focusing on is in Jumeirah Village, located in District 10 and brings together 8 plots in one wholesome community that include ground plus four storey apartment buildings and ground plus two storey villas. The project is called Haven Residences, differentiated as Haven Villas and Haven Apartments part of "The Sanctuary" Project in Jumeirah Village, a selection of studios, one and two bedroom apartments and three bedroom townhouses. Phase 1 of this project is under construction, comprises 355 units and is scheduled for delivery in 2019 (www.thesanctuaryuae.com / www.havenapartments.ae)

Speaking from a regional perspective, Sebastian Carlton discussed the Middle Eastern market and the interesting challenges it presents. For him the young and large population in Saudi Arabia, for example, presents a huge market opportunity for mid-priced and affordable housing products but found such markets difficult to work within without a strong local partner; other ME areas presented diverse opportunities but carried excessive risk due to regional conflict. He finds the UAE to be a safe haven in the region and refers to it as the Switzerland of Middle East because "there is security and safety for families, tax efficiency, a robust legal structure and a high level of standard of living. It's a neutral and fair society for people."

He explained the interplay between the current financial market and Expo2020 where the liquidity in this market is heavily linked to oil prices, and liquidity issues arise when large GCC investors sit out of the market. Gulfstream redesigned The Sanctuary project to take advantage of this scenario. Discussing his reasoning behind their value-driven project, he said "If you look at the products in the market that are stable with high transactional volume, they are generally up to Dh2 million. The big-ticket units are moving more slowly. Not surprisingly then, 65% of Gulfstream's current offering are priced under Dh1 million. He compared the UAE market to other markets like Hong Kong and Singapore, all geographic hubs with small transient populations, and found UAE incomparable in terms of value for investment. He applauded the vison of Sheikh Mohammed and the UAE's level of infrastructure, safety, security, and neutrality, all in a tax-favorable environment where investors are able to achieve 8% plus in yields.

According to Carlton, in 2016 there were 37 Expo related infrastructure projects initiated with a value of around US$2.2 billion, with a further 47 projects to be initiated in 2017 with a value in the region of US$3 billion. Such investment, Carlton proposes, acts as an economic buffer for Dubai/UAE against more volatile regional markets. Additionally, the population of Dubai is set to rise from 2.75 million currently to 3.1 million by the end of Expo, and Carlton explained that the Expo, with an estimated 25 million unique and 33 million total visits to Dubai, would prove to be a significant showcase for the region.

Speaking about the competitive edge of Gulfstream's portfolio, he spoke about his design focused team that come from an architectural background. They have an exclusive partnership with Louise Bradley (www.louisebradley.co.uk), one of the top 50 Interior Designers in the world. Ms. Bradley has worked on the interior design and architecture aspect of Haven Residences, and has a London-based design studio. Impressively, Louise has delivered Interior Design and Architecture for many royal families in the Middle East and Europe. Carlton is convinced that the quality of the design and finishes of their Haven offerings, will provide them with a competitive advantage. The Villas for example have been designed with the entire top floor dedicated to the Master Suite along with a Jacuzzi and large terrace.

For Carlton, another important edge that Gulfstream offers investors is the sense of community that comes from their consistent and cohesive design found in their large scale projects, that are tied together with community gardens, swimming pools, spa and gym. They pride themselves on building a community, where families come together holistically. The Sanctuary project for example, benefits from a land area of almost 7 acres punctuated with beautiful landscaped gardens and facilities.

Another area that Gulfstream leads the market in is sustainability. Carlton considers this area to be a corporate responsibility and works very closely with leading green building and energy consultants to ensure that all projects go beyond basic sustainability requirements. For example, The Sanctuary phase 1 is not only green building compliant but future proofed for sustainability.

Over the next 5 years, Gulfstream is looking to deliver approximately 1,000 units. Their growth focus however, would be in developing niche markets. Carlton is looking to expand into the hospitality and service sector parallel to their current products. He is planning to link services to residences and also offer a unique staff accommodation product. Carlton is excited about the many new opportunities that come along with the ever-dynamic city of Dubai, and has concrete plans to capitalize on the flourishing current market with his game-changing ideas.

Finally, the establishment of The Gulfstream Foundation was discussed, which is a non-denominational charitable foundation focusing on need and does not discriminate on religion, race, gender or political affiliation. Gulfstream is pleased to commit 10% of the company's profits to the Foundation, which will be used to provide aid and relief for causes in the region. They are especially targeting the huge refugee crisis, and are happy to be linking to charities already on the ground such as Médecins Sans Frontières, Red Crescent, UNICEF and Save The Children (www.gulfstreamfoundation.com).