Dubai-based Sobha Realty will invest $600 million to build about 700 homes in Texas. The money will go into two cities in the Dallas–Fort Worth area, Celina and Frisco. The company plans to develop single-family homes in five phases over the next five years.
Vipin Das, chief executive of Sobha Realty US, shared the plans with The National. The company began operating in the US last year. Das said Sobha wants to add more American cities to its portfolio. It is also moving ahead with land in Australia.
At a glance
Investment: $600 million
Homes: about 700 single-family homes
Locations: Celina and Frisco, Texas
Timeline: five phases over five years
First sales: 34 homes in Celina, priced from $1 million to $1.5 million, expected next year
Land and first launch
Sobha has acquired about 105 hectares (260 acres) across the two cities. It owns 64 hectares in Celina and 40 hectares in Frisco.
Sales of the first 34 homes in Celina are expected to begin next year. Prices will start at $1 million and go up to $1.5 million, Das said.
How the projects will be funded
Sobha will fund the projects through a mix of its own equity and debt raised in the local market. Das said the first financing is already in place.
"Last week we got the first development loan approved for our first two projects from Bank7 and CCB, so that's good news for us," Das said.
Who is buying
Das said demand comes mainly from local residents and corporate employees. He described the two locations differently.
"In Frisco there is a lot of Asian community living and in Celina it's a kind of healthy mix, with people wanting more space as they upgrade their life and move into a bigger space … a move-up home or second move-up home for a bigger family," he said.
Corporate moves are adding to demand. Goldman Sachs is setting up a campus that will accommodate 5,000 employees. The New York Stock Exchange has a new regional headquarters in Dallas. AT&T is moving its base from Downtown Dallas to Plano, which is creating new housing demand in North Dallas.
"The trend we are seeing towards the north is growing. We are very well positioned within the corridor of growth, where Frisco, Plano and … further growth to Celina is happening," Das said.
Texas housing market
Housing demand in Texas has held up. According to the Texas Real Estate Research Center, closed home sales in the state rose 8.6% year on year in June, reaching 34,956. The average sale price that month was $342,900.
Plans beyond Dallas
Sobha wants to build a "national presence" in the US, Das said. The places it is targeting for new projects are Houston, Austin, Nashville, Phoenix and Florida.
"We are seriously exploring Houston. We are very seriously exploring Austin," he said.
Outside the US, Sobha has bought land in Brisbane and the Gold Coast in Australia. Das said construction there is expected to begin next year, once the approval process is complete. He did not share full details.
About Sobha
PNC Menon founded Sobha. He began with an interior decorating company in Oman in the 1970s. The firm has grown quickly in the UAE, with projects in Dubai, Abu Dhabi and Umm Al Quwain.
This year, Sobha launched a Dh40 billion ($10.9 billion) residential project in Abu Dhabi, marking its entry into the emirate's residential market. In January, it unveiled a Dh50 billion development in Dubai.
Sobha reported total sales of Dh30 billion last year, up 30% annually. The growth came from its projects in Dubai and Umm Al Quwain.
