Dubai’s Sobha Realty eyes $600m US housing push and targets further expansion

Dubai-based real estate developer Sobha Realty is planning to invest $600 million to build approximately 700 homes in Texas, as part of its expansion efforts in the United States. The company, which recently entered the US market last year, has acquired around 105 hectares of land across Celina and Frisco in the rapidly growing Dallas-Fort Worth area.

Sobha intends to develop single-family homes over five phases, with sales of the first 34 homes in Celina expected to commence next year, priced between $1 million and $1.5 million, according to Vipin Das, Sobha Realty US chief executive. The projects will be funded through a combination of debt and equity, with the company raising local debt.

The company possesses 64 hectares of land in Celina and 40 hectares in Frisco, with housing demand primarily originating from residents and corporate employees. Frisco is predominantly inhabited by an Asian community, while Celina boasts a diverse population seeking larger living spaces, such as move-up homes or second move-up homes for growing families.

Furthermore, corporate entities like Goldman Sachs, which is constructing a campus for 5,000 employees in Frisco, and AT&T, relocating its headquarters from downtown Dallas to Plano, contribute to the increasing demand for housing in the region. North Dallas is witnessing a growing demand for housing, which Sobha is strategically positioned to capitalize on.

Texas' housing market has demonstrated resilience, with June closed sales volumes increasing by 8.6 percent year-over-year, reaching 34,956 homes. The average sales price for homes in June was $342,900. Sobha intends to further expand its footprint in other US cities to establish a "national presence," including Houston, Austin, Nashville, Phoenix, and Florida.

The company is actively exploring Houston and Austin as potential markets. In Australia, Sobha has acquired land in Brisbane and the Gold Coast, with construction scheduled to commence next year following the necessary approvals. Founded by PNC Menon in Oman in the 1970s, Sobha has rapidly expanded in the UAE, with projects in Dubai, Abu Dhabi, and Umm Al Quwain.

It recently inaugurated a Dh40 billion ($10.9 billion) residential project in Abu Dhabi, marking its entry into the emirate's residential sector. Last year, Sobha reported total sales of Dh30 billion, a 30 percent annual growth driven by its ventures in Dubai and Umm Al Quwain. Additionally, Sobha unveiled a Dh50 billion development in Dubai in January, as the company continues to strengthen its property portfolio in the emirate.