The new venture is aligned with Samana’s backward integration strategy
Anoop Menon, Zawya Projects
Dubai-based Samana Developers is expanding its operations by launching a new contracting company to tackle anticipated resource constraints in the emirate’s rapidly growing real estate market.
In an exclusive interview with Zawya Projects, CEO Imran Farooq revealed that the private developer is making an initial investment of 150 million UAE dirhams ($41 million) in its new contracting business, furthering its backward integration strategy to ensure the smooth delivery of its projects.
He highlighted that with most mainstream developers experiencing over 250 percent growth compared to the previous year, concerns have arisen regarding how the increased volume of projects will be completed.
Samana Developers is currently ranked seventh by the Dubai Land Department (DLD) in terms of the total number of units sold. Last year, it was placed among the top 10 highest off-plan selling developers in Dubai, according to real estate intelligence provider Property Monitor.
“We believe there is a resource constraint, with a shortage of contractors, insufficient machinery, and inadequate labour camps to accommodate the growing workforce,” Farooq said.
He anticipates these issues will become the biggest limiting factor for developers, if not by the end of 2025, then certainly by 2026. In response, the company is taking a proactive approach by integrating backward into its supply chain.
“By investing in-house capabilities, be it our in-house design unit or the new contracting company, we’re taking control of resources to maintain our reputation for on-time delivery,” he said.
The new contracting business is built on a three-pronged strategy, according to the Samana CEO. First, a brand-new company is being established from the ground up, with the license being upgraded and all necessary engineering and operational requirements being fulfilled. Second, Samana Developers is in the final stages of negotiations with two existing contractors to form a strategic joint venture (JV) that will work exclusively on its projects. Third, the company is adopting a white-label approach, securing concrete and steel supplies for exclusive use.
“With billions of dirhams in escrow, we are well-positioned to navigate any market conditions,” Farooq stated. “We successfully weathered the challenges of the pandemic, and now, in a resource-constrained environment where every major developer is focused on securing contractors, we are committed to locking in our strategies and resources to ensure smooth project delivery.”
He emphasised that the new contracting business and JV are designed to establish a dedicated supplier to support the company’s core development operations.
“A specific number of projects would be exclusively contracted to the JV, based on the partner’s capacity and resources,” he concluded.
Samana Developers currently has 42 real estate projects in various stages of development, its most recent launch being Ocean Pearl 1 and Ocean Pearl 2 projects on Dubai Islands. In March 2024, the company said it would invest 12.5 billion UAE dirhams ($3.4 billion) in new residential projects in Dubai and award 18 construction contracts this year.
(Reporting by Anoop Menon; Editing by SA Kader)
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