Binghatti declares itself a masterplanner with ‘Mercedes city’
Developer Binghatti Holding has advanced beyond apartment building to position itself as a master developer, as it announced plans on Tuesday for a 10 million square foot district that will include a series of Mercedes-Benz-branded towers.
The developer said the Binghatti City project in Dubai’s Meydan area has an investment value of AED30 billion ($8.2 billion), though it gave no detailed cost breakdown. Ten million square feet is roughly the size of Dubai’s City Walk district.
Key details such as completion dates, prices and the number of units were not disclosed. Binghatti said the masterplan will be a “city within a city”, featuring apartments, retail space, parks, green areas, sports zones, dining and community facilities.
Binghatti’s tie-up with Mercedes-Benz has proven successful: 33 Mercedes-Benz units by Binghatti have sold this year, generating AED519 million in sales, with prices reaching around AED5,600 per square foot — about 44 percent higher than the average off-plan apartment in Downtown Dubai.
Founded in 2008, Binghatti has grown to have around 10,000 employees and, by the developer’s own count, has 80 projects with a combined value of more than AED80 billion.
As of the third quarter of this year, Binghatti had a development backlog of around AED30 billion and reported AED2.6 billion in net profit for the nine-month period.
The company ended the nine months to September with AED7.7 billion in cash and bank balances, although more than half — AED6.4 billion — is held in escrow accounts tied to project construction and controlled by Dubai’s Real Estate Regulatory Agency.
Interest-bearing debt stood at AED6.8 billion at the end of September, more than double year-earlier levels. The increase reflects new financing raised to fund land purchases, accelerate project launches and refinance the capital structure, rather than to cover operating shortfalls.
Further reading:
- Red Sea development signals intention to be the new Med
- Ras Al Khaimah apartments cost more than Dubai’s best
- Dar Global launches $4bn city project in Oman
Binghatti makes most of its money from overseas sales. Non-resident investors accounted for around 60 percent of total sales in the first nine months of the year. As analysts have noted, rich overseas buyers are fuelling the top end of the market.
“We must remember that Dubai has a new flavour of buyers in town. Namely those looking at Dubai as a secondary home market, particularly the ultra-high-net-worth individuals. We know that around 55 percent of HNWs view Dubai as a market to buy a secondary home,” Knight Frank partner Faisal Durrani said on local radio this month.
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