One of Dubai’s fastest-growing property developers is taking its model to Texas, committing $600 million to a housing programme in the suburbs north of Dallas and signalling that more American cities may follow.
Sobha Realty plans to build about 700 single-family homes across Celina and Frisco over the next five years, Vipin Das, chief executive of Sobha Realty US, told The National. The company began operating in the United States last year.
The project
Sobha has acquired around 105 hectares (about 260 acres) across the two cities, with roughly 64 hectares in Celina and 40 in Frisco. Development will proceed in five phases. Sales of the first 34 homes in Celina are expected to begin next year, at prices between $1 million and $1.5 million.
The projects will be financed through a combination of debt and the company’s own equity. Mr Das said the first development loan for the first two projects was approved last week by Bank7 and CCB.
Why North Dallas
Mr Das pointed to the northward pull of the Dallas–Fort Worth region, where growth is spreading from Frisco and Plano out towards Celina. Demand in Frisco comes partly from a large Asian community, he said. In Celina, buyers tend to be families upgrading to larger homes.
Corporate relocations are adding to the demand. A Goldman Sachs campus planned for the area is expected to house 5,000 employees. The New York Stock Exchange is opening a regional headquarters in Dallas, and AT&T is moving its base from downtown Dallas to Plano.
Wider Texas figures point the same way. According to the Texas Real Estate Research Center, closed home sales in June rose 8.6 per cent from a year earlier to 34,956, and the average sales price reached $342,900. Sobha’s planned homes sit well above that average, targeting the move-up segment of the market.
Beyond Texas
The Dallas project is meant as a starting point. Mr Das said the company wants a national presence and is looking at Houston, Austin, Nashville, Phoenix and Florida. He said Sobha is “seriously exploring” Houston and Austin. Sobha is also planning projects in Australia after acquiring land in Brisbane and the Gold Coast, with construction expected to start next year once approvals are in place.
A home market in full expansion
The overseas push follows rapid growth at home. Sobha reported total sales of Dh30 billion last year, up 30 per cent, driven by projects in Dubai and Umm Al Quwain. In January it unveiled a Dh50 billion development in Dubai, and this year it entered Abu Dhabi’s residential market with a Dh40 billion ($10.9 billion) project.
The company was founded by PNC Menon, who began in business with an interior decorating firm in Oman in the 1970s. It has since grown into one of the UAE’s larger private developers, with projects across Dubai, Abu Dhabi and Umm Al Quwain.
What the move signals
The Texas plan is part of a wider trend of Gulf-based developers looking abroad, spreading exposure beyond a single home market. Dubai’s property sector has been buoyant, but developers have to weigh regional uncertainty, the pace of new launches and competition for land. Building homes in a large, diversified economy gives a company like Sobha another source of revenue.
The move also carries risks. US homebuilding is a mature, competitive field with its own cost pressures, local regulation and financing conditions, and a newcomer must establish its name among buyers who do not know it. Sobha’s own numbers show how modest this first step is relative to its Gulf business. Its $600 million Texas commitment is small next to the Dh40 billion Abu Dhabi project.
For now, the first test comes next year, when the initial 34 homes in Celina go on sale. How quickly they sell, and at what prices, will show whether a Dubai developer can win over American homebuyers.
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