Property developer eyes growth in Europe, US instead, says founder PNC Menon

  Property developer eyes growth in Europe, US instead, says founder PNC Menon

Dubai developer Sobha Group has ruled out expansion elsewhere in the GCC but plans to be in “one other non-Middle Eastern, non-Asian territory by 2020”, its founder and chairman told Arabian Business.

Indian-born PNC Menon said “a lot of opportunities” had arisen to expand the company outside the UAE and into other Gulf states.

At present, the group has schemes either under construction or in planning in Dubai and Umm Al Quwain, as well as a large operation in India, but its work elsewhere in the GCC has been limited to interiors contracting in Oman, Qatar and Bahrain in the early days of the business.

In an interview with Arabian Business, Menon said the group “has no further expansion planned in the Middle East”.

“We have had a lot of opportunities coming our way, but I have decided it is better we consolidate here [in the UAE] and look at geographies other than the Middle East,” he said.

He declined to divulge full reasons for his decision other than to say that there are “tremendous” untapped opportunities in the UAE for Sobha Group, and that Dubai in particular “is one of the easiest places in the world to do business – it is one of the safest investment destinations and has the highest business standards and ethics.”

He added that he preferred to concentrate on building Sobha Group into one of the “top three best real estate brands in Dubai” in the next five years, before commencing measured global expansion.

This is likely to start in either the US or UK and early-stage talks have begun with prospective joint venture partners, Menon said.

“We are looking at everything but I am not in a hurry now. There is a certain amount of consolidation we have to do first.

“I will be looking at further expansion post-2019. So 2017, ‘18, ‘19 are consolidation years for us [in the UAE]; from 2019, we will be looking at other geographies, and from 2019 we will be operating in other geographies.

“We will not be putting any money in until 2019-2020.”

Menon said he did not plan to tap the potentially lucrative Asian market, saying he is fearful of high levels of corruption there. “We have decided not to go into Asia and some other countries. Because one thing I have started feeling and making company policy is that if corruption is there, we would prefer to avoid that country,” he said.

He said he expects Dubai’s property market to enter a recovery phase by the second quarter of 2017 after bottoming out at the end of last year.

Sobha Group’s $8.5 billion District One scheme near Meydan Racecourse spans a 1,000-acre site and comprises more than 600 villas in phases one and two. The $4 billion Sobha Hartland project comprises 344 villas and townhouses over 183 acres of land. The first phase is set to complete by the end of this year.

A long-term UAE resident and Omani citizen, Menon ranked 11th in Arabian Business’ list of the Richest Indians in the GCC last year, with an estimated net worth of $1 billion. Sobha Group has a listed entity on the Bombay Stock Exchange.

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