Dubai’s Sobha Realty eyes $600m US housing push and targets further expansion

Dubai developer Sobha Realty is investing $600 million to build about 700 homes in Texas as it expands in the US, with plans to enter more cities across the world’s largest economy, a senior executive has said. The company, which began US operations last year, has acquired about 105 hectares across Celina and Frisco in the fast-growing Dallas-Fort Worth metropolitan area, where it plans to develop single-family homes over five phases in the next five years. Sales of the first 34 homes in Celina are expected to begin next year, with prices from $1 million to $1.5 million, Vipin Das, chief executive of Sobha Realty US, told The National. The projects will be funded through a mix of debt and its own equity, with the company raising local debt. “Last week we got the first development loan approved for our first two projects from Bank7 and CCB, so that's good news for us,” Mr Das said. It owns 64 hectares of land in Celina and another 40 in Frisco, with demand for housing mainly coming from residents and corporate employees. “In Frisco there is a lot of Asian community living and in Celina it’s a kind of healthy mix, with people wanting more space as they upgrade their life and move into a bigger space … a move-up home or second move-up home for a bigger family,” he said. Demand is also coming from new corporate offices, including a Goldman Sachs campus that will accommodate 5,000 employees and regional headquarters for the New York Stock Exchange in Dallas. Telecom giant AT&T is moving its base from Downtown Dallas to Plano, which is creating new demand for housing in North Dallas. “The trend we are seeing towards the north is growing. We are very well positioned within the corridor of growth, where Frisco, Plano and … further growth to Celina is happening.” Demand for housing remained resilient in Texas, with June closed sales volumes rising 8.6 per cent on an annual basis to 34,956, according to the Texas Real Estate Research Centre. The average sales price for homes hit $342,900 in June. The company plans to expand into other cities in the US to create a “national presence”, Mr Das added.

Houston, Austin, Nashville, Phoenix and Florida are being targeted as places in which to build. “We are seriously exploring Houston. We are very seriously exploring Austin.” Sobha is also looking to expand in Australia after acquiring land in Brisbane and the Gold Coast, Mr Das said. Construction is expected to begin there next year following the approval process, he added, without divulging the full details. Sobha was founded by PNC Menon, who began his entrepreneurial journey with an interior decorating company in Oman in the 1970s. The firm has been rapidly expanding in the UAE, with projects in Dubai, Abu Dhabi and Umm Al Quwain. It launched a Dh40 billion ($10.9 billion) residential project in Abu Dhabi, marking its entry into the emirate's residential sector this year.

Sobha reported total sales of Dh30 billion last year, up 30 per cent annually, with growth driven by its projects in Dubai and Umm Al Quwain. It also unveiled a Dh50 billion development in Dubai in January as it continues to grow its property portfolio in the emirate.