Lorraine Bangera sits down with Mark Phoenix, MD of Omniyat, to talk about the young company’s strategy of developing buildings that reflects art and yet is completely functional. He also talks about how to maintain a steady growth in the market and shares his keys to success
Mark Phoenix joined the Omniyat team seven years ago as a development manager, which he quirkily says is basically “a managing director (if you will) over a number of projects.” When asked about his nippy climb to the top and becoming managing director (MD), he jokes, “You will have to ask my chairman why he chose me, I won’t say it’s because I’m brilliant!”
The good-humored mid 40s man takes us back to his earlier days as a fresh graduate from college when he began to work in big construction companies in the UK. His last job before Omniyat included delivering community projects for retired citizens. Gaining a lot of practical knowledge from his past 20 years of experience in construction, the MD manages to incorporate all of it in his current position. His previous experience enables him to know what he is doing and how to do it. Since taking over the role of MD, Phoenix has ensured a steady growth within the organisation and among projects with meticulous management in implementing new strategies.
He believes that his team, a group of experienced industry professionals, don’t need to be instructed about how to carry out project. Confident about his team, Phoenix emphasises that their knowledge about the industry is a major reason why they have done so well. He says that it all began in 2008 when they began to change the way Omniyat did business. He says that that changes occurred during and because of the financial crash in the same year. Omniyat restructured and analysed its current projects and concentrated on the most lucrative projects that were located in the centre of Dubai.
Driven by art
Pheonix says that art is very important to the group. “You should provide something that enhances someone’s lifestyle when they use it, rather than just building boxes in which people live in.”
He says that they try to infuse art into their projects and provide something different, and aim to be enhance lifestyle whether they are building a resident building or an office. He says that without art projects would be meaningless and would kill the drive to deliver excellence. Thus, the group collaborates with renowned designers across the world to execute high-end buildings in the UAE.
While there is tremendous emphasis on Omniyat’s buildings to look beautiful, it is still functional.
The MD says that even though Omniyat tries to build iconic buildings, that doesn’t have to be the mandate. He also says that they aren’t unreasonable with their design.
“We don’t just expect our contractors to build buildings floating in the sky.”
Even though the group is noticeably driven by art and design, it also concentrates on constructability. “Yes, our buildings are beautiful,” Phoenix says, “But that doesn’t mean we are building monuments, these buildings have to work as well.”
“No point of building a twisty building that nobody can use,” he adds.
Phoenix says that even though the team is open to integrating extravagant design, they also make sure the design can be incorporated. Confident about his team’s knowledge on the subject, Phoenix says that this doesn’t mean that they have to necessarily consider outside parties but could do it themselves.
He further explains his point with the example of upcoming project, The Opus, which looks complicated to construct but isn’t. He says that another important consideration is to hire the best contractors you could work with. In case of The Opus, Ommiyat is working with Brookfield Multiplex who, Phoenix says, know what they are doing.
Omniyat’s conditions on choosing the right contractor includes capability, track record and speed. Phoenix adds: “Price should not be a consideration as the project might take twice as long and it wouldn’t be what you wanted it to be.”
Talking about maintenance
While it is essential to build a building that is usable, it is equally important to make sure it is easily maintainable. He says: “We look at three different aspects of a development when we begin: the investment required to build a project, the development part which is design and constructability, and the post management aspect.”
Phoenix says that at Omniyat, maintenance is considered before setting up i.e. during the design brief in the initial stages of the project. “It’s in an obvious consideration as we have our own facilities management (FM) team within the organisation.”
Phoenix says that this decision was made in 2008, when the company was still growing and none of the developments had started. “We made a conscious decision to build projects that could be maintained to avoid chaos from the very beginning.”
He explains that building a project that is “unmaintainable” and/or “expensive to maintain” is pointless. In property sales, according to Phoenix, buyers always consider the service charge. “It is important to not build a building that is just easy on the eyes but is a nightmare to maintain.”
By including the FM professionals from the beginning, Phoenix says that now his design team have a better understanding about how to design something that could maintain a reasonable service charge later.
Phoenix considers including FM input in the beginning a no brainer. He says, “You just cannot expect people to pay up later.” He explains that by being inconsiderate toward maintenance a developer can eventually be negatively affected. He says that buyers would come back and say, ‘Your building looks good, but costs me a fortune!”
Even though including FM teams in the design phase is agreed to be productive for the overall lifecycle of the building, it is not done a lot in this region. Phoenix says that this is probably because most developers do not have an in-house FM team like they do. Involving FM teams are much easier when they are all working under one umbrella.
Of course this doesn’t mean it is a smooth and easy road, Phoenix admits that when several teams come together it is a good debate and finding a balance is tough but not impossible. He says the teams always find the right balance as they are working for a common goal—a functional and well-designed building. He says: “We as a team have a genuine drive to make a building great, so it comes to us naturally to work well together.”
Funds, funds, funds
Phoenix says that when he first came to Dubai in 2008, developments usually worked around presale collection. “That’s the way buildings were built here.” In 2010, however, Omniyat changed its approach towards funding. “We decided to over-capitalise our buildings, which is basically less risky in the long run.”
By over-capitalising, the group made sure they have enough funds to build a building before properly selling it. He says: “Our aim was to start only those projects that we know we could complete.” This was done by a mixture of funds: a three-pronged strategy of equity, debt and collection. This means that funding was drawn out of in-house cash, bank loans, investor’s cash and some sale. “We didn’t want to solely depend on sale, because if customers pulled out it would stop construction.”
Currently, Omniyat has AED12 billion in development across 13 projects, and still follow the same strategy. Phoenix explains how they sort their projects under green and red categories. Green being completely funded and ready to go, and red being not completely funded yet. “We don’t start a development unless it is in the green category.”
The green category makes sure that a project has enough funds to go ahead “no matter what.” Phoenix says that this is the time the group goes ahead and signs the construction contract and already has land secured for construction.
Stable growth in Dubai
“The development sector is difficult anywhere in the world,” says Phoenix, “which is probably why the rewards are quite high.”
He says that the difficulties vary in different regions, in London for example the main problem would be that there is a finite amount of land that could be purchased to develop and it is very expensive. In Dubai, on the other hand, there is comparatively more opportunity.
“Right now, what we need to consider is how fast we want to grow,” says Phoenix. The group’s current land bank will be exhausted by the end of 2018 or early 2019, and all the projects under construction right now would be completed by then. “It is now time to look at the next projects that would come up after 2018,” he says. In terms of future projects, Phoenix expresses interest in developing a big masterplan as it is something the group hasn’t done yet.
The steadiness in the real estate and construction market is all what Phoenix wants. He says that he would prefer if it didn’t shift and jump up or down. He adds that there are many positive factors that contribute to the steady growth including the rise in population and increase in tourism. He says that if the tourism target is met, which is a rise by 10 million tourists from 2010 to 2020, then the need for more buildings will definitely increase.
Phoenix says that the rental market is strong with a good demand for property, this would lead to a gradual rise in prices. However, he notes that Omniyat does not consider the market when it comes to setting prices. He believes that they need to set prices based on what they are providing rather than to compete with a rival in the market.
The key to do well in this industry, according to the MD, is keeping having a long-term approach, looking at business plans and market growth in the next five years. He says: “If you have a monthly approach or worse a weekly one, you will drive yourself crazy.” When you have a long term view, you tend to be steadier. He says that a short-term player has a tendency to wobble by the shifts in the market.
The success behind the young and small team at Omniyat is credited to its Executive Chairman and CEO, Mahdi Amjad. Phoenix says that his team is centrally driven by their chairman’s vision who is actively involved with them on a daily basis. “He makes sure we deliver the best we can.”
“The key behind our quick success,” he says ironically, “is that we don’t rush our projects and make sure it’s done properly.”
